COMPREHENSIVE ANNUAL FINANCIAL REPORT RUTHERFORD …

COMPREHENSIVE ANNUAL FINANCIAL REPORT

RUTHERFORD COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2005

COMPREHENSIVE ANNUAL FINANCIAL REPORT


FOR THE YEAR ENDED JUNE 30, 2005

DEPARTMENT OF AUDIT JOHN G. MORGAN

Comptroller of the Treasury

DIVISION OF COUNTY AUDIT RICHARD V. NORMENT

Assistant to the Comptroller

ARTHUR L. ALEXANDER Director

JEFF BAILEY, CPA, CGFM, CFE Audit Manager DOUG BODARY, CPA, CFE EUGENE HAMPTON, II, CGFM NATHAN ABBOTT, CISA, CFE Auditor 4 State Auditors

LISA NOLEN, CPA, CGFM DIRECTOR OF FINANCE


This financial report is available at www.comptroller.state.tn.us

TABLE OF CONTENTS

Exhibit/Table Page Audit Highlights i INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement for FY 04 Report 7 Organizational Chart 9 Rutherford County Officials 11 FINANCIAL SECTION Independent Auditor’s Report 15 Management’s Discussion and Analysis 19 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets A 33 Statement of Activities B 35 Fund Financial Statements: Governmental Funds: Balance Sheet C-1 37 Reconciliation of the Balance Sheet of Governmental

Funds to the Statement of Net Assets

C-2

38 Statement of Revenues, Expenditures, and Changes in Fund Balances

D-1

39

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

D-2

41 Proprietary Funds: Statement of Net Assets E-1 42 Statement of Revenues, Expenses, and Changes in Net

Assets

E-2

43 Statement of Cash Flows E-3 44 Fiduciary Funds: Statement of Fiduciary Assets and Liabilities F-1 45 Statement of Changes in Fiduciary Net Assets F-2 46 Notes to the Financial Statements 47

Exhibit/Table Page REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Actual (Budgetary Basis) and Budget:

General Fund G 97 Notes to the Required Supplementary Information 101 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES:

Nonmajor Governmental Funds: Combining Balance Sheet H-1 107 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

H-2

109

Schedules of Revenues, Expenditures, and Changes in Fund Balances – Actual (Budgetary Basis)

and Budget:

Solid Waste/Sanitation Fund H-3 111 Industrial/Economic Development Fund H-4 113 Drug Control Fund H-5 114 Adequate Facilities/Development Tax Fund H-6 115 Highway/Public Works Fund H-7 116 Public Works Fund H-8 117 Major Governmental Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Actual and Budget:

General Debt Service Fund I 121 Proprietary Funds: Combining Statement of Net Assets J-1 125 Combining Statement of Revenues, Expenses, and

Changes in Net Assets

J-2

126 Combining Statement of Cash Flows J-3 127 Fiduciary Funds: Combining Statement of Fiduciary Assets and

Liabilities

K-1

131 Combining Statement of Changes in Assets and

Liabilities – All Agency Funds

K-2

132 Component Unit: Discretely Presented Rutherford County School

Department:

Balance Sheet – Governmental Funds L-1 137 Reconciliation of the Governmental Funds Balance

Sheet to the Statement of Net Assets

L-2

138 Statement of Revenues, Expenditures, and Changes

in Fund Balances – Governmental Funds

L-3

139 Reconciliation of the Statement of Revenues,

Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

L-4

140

Exhibit/Table Page Schedules of Revenues, Expenditures, and Changes

in Fund Balances – Actual (Budgetary Basis) and Budget:

General Purpose School Fund L-5 141 School Federal Projects Fund L-6 144 Statement of Fiduciary Net Assets L-7 146 Statement of Changes in Fiduciary Net Assets L-8 147 Miscellaneous Schedules: Schedule of Changes in Long-term Notes and Bonds M-1 151 Schedule of Principal and Interest Requirements by

Year – Bonded Debt and Notes

M-2

152 Schedule of Investments – All Funds M-3 153 Schedule of Notes Receivable – All Funds M-4 154 Schedule of Transfers – All Funds and Discretely

Presented Component Unit

M-5

155 Schedule of Salaries and Official Bonds of Principal

Officials

M-6

156 Schedule of Detailed Revenues – All Governmental

Fund Types

M-7

157 Schedule of Detailed Revenues – All Governmental

Fund Types – Discretely Presented Rutherford County School Department

M-8

169 Schedule of Detailed Expenditures – All

Governmental Fund Types

M-9

171 Schedule of Detailed Expenditures – All

Governmental Fund Types – Discretely Presented Rutherford County School Department

M-10

209 Schedule of Detailed Receipts, Disbursements, and

Changes in Cash Balances – City Agency Funds

M-11

225 STATISTICAL SECTION Net Assets by Component 1 229 Changes in Net Assets 2 230 Governmental Activities Tax Revenues by Source 3 233 Fund Balances of Governmental Funds 4 234 Changes in Fund Balances of Governmental Funds 5 235 Assessed Value and Estimated Actual Value of Taxable

Property

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237 Property Tax Rates – Direct and Overlapping

Governments

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238 Principal Property Taxpayers 8 239 Property Tax Levies and Collections 9 240 Assessed and Estimated Actual Value of In-Lieu-of Tax

Agreements

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241 Ratio of Net General Obligation Bonded Debt 11 242 Direct and Overlapping Debt 12 243

Exhibit/Table Page Demographic Statistics 13 244 Principal Employers 14 245 Full-time Employees by Function 15 246 Operating Indicators by Function 16 247 Capital Assets by Function 17 248 SINGLE AUDIT SECTION Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

251 Auditor’s Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133

253 Other Auditor’s Report on Community Care of Rutherford County, Inc.:

Report on Internal Control Over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

255 Other Auditor’s Report on Emergency Communications District:

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

256 Schedule of Expenditures of Federal Awards and State Grants

257

Schedule of Audit Findings Not Corrected 259 Schedule of Findings and Questioned Costs 261 Auditee Reporting Responsibilities 269

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Audit Highlights Comprehensive Annual Financial Report

Rutherford County, Tennessee For the Year Ended June 30, 2005

Scope We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Rutherford County as of and for the year ended June 30, 2005.

Results Our report on Rutherford County’s financial statements was unqualified. Our audit resulted in nine findings and recommendations, which we have reviewed with Rutherford County management. Detailed findings, recommendations, and management’s response are included in the Single Audit Section of this report.

Findings

The following are summaries of the audit findings: OFFICE OF COUNTY MAYOR ♦ The office solicited bids for a truck using bid specifications that could be met by only

one manufacturer. OFFICE OF DIRECTOR OF FINANCE ♦ The Workers’ Compensation Fund had a net assets deficit of $395,906 at

June 30, 2005. OFFICE OF HIGHWAY SUPERINTENDENT ♦ The office did not competitively bid for the purchase of a truck.

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OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK ♦ The office used an unauthorized signature stamp. ♦ The office did not maintain formal user documentation pertaining to the court’s

software. OFFICE OF REGISTER ♦ The register allowed individuals unsupervised access to her office to research

documents after business hours. This unsupervised access seriously weakens internal controls over assets.

OFFICE OF SHERIFF ♦ The office did not deposit commissary funds to the office bank account within three

days of collection as required by state statute. OTHER FINDINGS ♦ Duties were not segregated adequately among the officials and employees in the Office

of Juvenile Court Clerk and the Rutherford Correctional Work Center. ♦ County officials had not adopted a central system of purchasing.

State of Tennessee Comptroller of the Treasury

Department of Audit Division of County Audit

INTRODUCTORY SECTION

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LETTER OF TRANSMITTAL

October 31, 2005

To the Honorable Nancy R. Allen, County Mayor, Board of County Commissioners, and Citizens of Rutherford County, Tennessee The Comprehensive Annual Financial Report of Rutherford County, Tennessee, for the year ended June 30, 2005, is hereby submitted as required by state statutes. These statutes require that all local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by the State of Tennessee’s Comptroller of the Treasury, Division of County Audit, or by independent public accountants within six months of the close of each fiscal year. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of Rutherford County, Tennessee. This report was prepared by the county’s Finance Department in conjunction with the above state agency. This report consists of management’s representations concerning the finances of Rutherford County, Tennessee. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of Rutherford County, Tennessee, has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of Rutherford County, Tennessee’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, Rutherford County, Tennessee’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

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The goal of the independent audit was to provide reasonable assurance that the financial statements of Rutherford County, Tennessee, for the fiscal year ended June 30, 2005, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Rutherford County, Tennessee’s financial statements have been audited by State of Tennessee’s Comptroller of the Treasury, Division of County Audit. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that Rutherford County, Tennessee’s financial statements for the fiscal year ended June 30, 2005, are fairly presented in accordance with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of Rutherford County, Tennessee, was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and compliance with legal requirements involving the administration of federal awards. These reports are available in a separate section of this comprehensive annual financial report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. Rutherford County’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government Located in the “Heart of Tennessee” with 615 square miles of land area, Rutherford County is the geographic center of the state. Rutherford County was incorporated in 1834 and is governed by an elected county mayor and a 21-member County Commission. Virtually all of the County Commission’s business is conducted through the committee system before moving to the full County Commission for a final vote. The county provides a full range of services, including elementary and secondary education; law enforcement and corrections; judicial; solid waste collection; public health and welfare; and the construction and maintenance of highways and related infrastructure. Rutherford County operates under Chapter 49, Private Acts of 1979, as amended. This legislation is specific only to Rutherford County and governs the authorities, responsibilities, and day to day operations of the Finance Department. The finance director reports directly to the County Commission and is responsible for establishing and maintaining an accounting system for all funds of the county in accordance with generally accepted accounting principles. The appropriated budget is prepared by fund, function (e.g. public safety), and department (e.g., sheriff). A formal budget is adopted annually by the County Commission and is reviewed daily by the Finance Department for compliance. No appropriation made by the County Commission may be legally exceeded, except by resolution of the full commission. The County Commission's budgetary control is at the

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major category level as defined by the Uniform Chart of Accounts, prescribed by the Tennessee State Comptroller’s Office. Budget to actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the General Fund, this comparison is presented on Exhibit G as required supplementary information. For governmental funds, other than the General Fund, with appropriated annual budgets, this information is presented on Exhibit H-3 through Exhibit I. The financial statements include separate reporting for three legally separate entities: (1) Rutherford County Board of Education, which operates the public school system in the county; (2) Community Care of Rutherford County, Inc., which provides nursing home care to the citizens of Rutherford County; and (3) Rutherford County Emergency Communications District, which provides a simplified means of securing emergency services through a uniform emergency number for the residents of Rutherford County. Rutherford County is financially accountable for only the Rutherford County Board of Education. ECONOMIC CONDITION Local Economy The economic outlook for Rutherford County is excellent. The strength of the Rutherford County economy can be attributed to our diversity. Rutherford County is one of the fastest growing counties in America with a phenomenal rate of growth of over 43 percent during the past ten years. Population growth has continuously driven a boom in residential construction. Our largest manufacturing employers include NISSAN USA, Ingram Book Co., Bridgestone/Firestone, Whirlpool Corp., General Mills, and Verizon Wireless. While manufacturing is our strongest economic segment, we are expanding into distribution, transportation, and other service-related industries. We are also home to Tennessee’s second largest state university with an enrollment exceeding 22,000, a veteran’s hospital, the south central regional office for State Farm Insurance, and numerous other companies. There are many significant factors that will undoubtedly contribute to the continued growth of our economy. One factor is that Rutherford County is within a day’s drive of 75 percent of the nation’s markets and only minutes from three major interstates. Also, the City of Murfreesboro is in the process of a massive development project involving city-owned land, noted as the “Gateway” project. Gateway is part of a broader plan to develop about 800 acres up to Interstate 24 and a new interchange into office buildings, retail shopping, and housing similar to that found in neighboring Williamson County. City and business leaders are banking on the development's attracting higher-paying jobs. Because of the county’s location, the county’s unemployment rate has been relatively stable. In the past ten years, the rate dropped to a low of 2.7 percent in fiscal 1999 (compared to 4.3 percent for Tennessee and 4.4 percent for the United States) to a high of 4.1 percent in fiscal 2003 (compared to 5.3 percent for Tennessee and 5.9 percent for the United States). It has remained at 4.1 percent for the last three fiscal years.

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Major initiatives Major financial pressures continue as a result of the very high population growth rate being experienced by Rutherford County. The most significant impact of this growth is the demand for additional capital investment. Tennessee statutes mandate to counties the primary responsibility for elementary and secondary education. Education is the largest single major expenditure function of the county. Over the last ten years the cost of education ranged from 63-68 percent of the combined total expenditures for the primary government and the board of education. In the fall of 2004, the Board of Education unveiled an updated ten-year capital projects plan based on assumptions that student population would grow 4.8 percent. It is estimated to require new funding totaling approximately $466 million over the next ten years in order to build ten elementary schools, seven middle schools and three high schools. Planned general capital projects include road improvements, a special operations building, workhouse, juvenile detention center, criminal justice center, parking garage, addition to the existing jail, and an archive building. It is estimated that the county will have a need for capital investment in these areas of more than $90 million over the next five to ten years. As of June 30, 2005, Rutherford County has funded approximately $14.5 million toward those projects. Long-term financial planning In addition to the initial construction costs for the above named facilities, Rutherford County will incur significant additional recurring costs to staff, operate and maintain the new facilities. The commissioners are aware of the significance of the additional costs and prepare the operating budgets accordingly. Unreserved, undesignated fund balance in the General Fund totals almost $17 million. This represents 32 percent of the General Fund’s current year expenditures and exceeds the amount set by policy (15 percent of current year expenditures). According to the commission’s policy, the excess is available to cover revenue shortfalls, unanticipated expenditures, and to ensure stable tax rates. Releveant financial policies To better serve the needs of the commission and the public, the commission reviewed and revised the county’s policy concerning the fund balance in the General Debt Service Fund. Initially the policy dictated that the unreserved, undesignated fund balance in General Debt Service Fund would be maintained at 75 percent of estimated debt service expenditures. The new policy requires the finance director to determine or estimate the principal and interest requirements of the county and recommend sources of revenues to meet those actual or projected requirements. Additionally, the policy of the county requires that at the beginning of each fiscal year the county will maintain an adequate amount in cash or investments in the General Debt Service Fund that is conservatively calculated to meet (1) cash flow needs, (2) budgeting contingencies, (3) emergency contingencies, (4) variable rate volatility contingencies plus (5) future forecasted needs. The ending fund balance of the General Debt Service Fund meets the new policy.

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Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the county for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2004. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, the county had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Rutherford County has received the Certificate of Achievement for ten consecutive fiscal years. We believe that our current CAFR continues to conform to the Certificate of Achievement Program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report could not have been accomplished without the efficient and dedicated services of the entire staff of the Finance Department during the past fiscal year. They are Elaine Cawthon, Teresa Jolly, Faye Elam, Linda Eckerson, Chrissi Caruthers, Sheryl Sandefur, Susan Thompson, Ted Lindsey and Nancy Jolly. I would also like to thank the staff of the county’s Office of Information Technology for keeping our accounting system operational. Credit should also be given to the county mayor and the governing body for their interest and support in planning and conducting the operations of Rutherford County government in a responsible and progressive manner.

Sincerely,

Lisa A. Nolen, CPA, CGFM Finance Director

Rutherford County OfficialsJune 30, 2005

Officials:

Nancy Allen, County MayorMike Williams, Highway SuperintendentHarry Gill, Jr., Director of SchoolsEvans Maples, TrusteeJohn Barbee, Assessor of PropertyGeorgia Lynch, County ClerkEloise Gaither, Circuit, General Sessions, and Juvenile Courts ClerkJohn Bratcher, Clerk and MasterJennifer Gerhart, RegisterTruman Jones, SheriffLisa Nolen, Director of Finance

Board of County Commissioners:

Nancy Allen, Chairman Mike Sparks Doug Shafer Richard SageJack Black Paul JohnsonWill Jordan John RodgersRobert Peay, Jr. Faye ElamCarol Cook Bob BullenJoe Jernigan Jeff PhillipsGary Farley Allen McAdooDwight Thorneberry Joyce EalySteven Sandlin William GoochAnthony Johnson Tina Jones

Highway Commissioners:

Richard Stegall, Chairman Randal JonesMichael Anderson Paul JohnsonJerry Baxter David VictoryWilliam Bratcher

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Board of Education:

Rick Wise, Chairman Dorris Jernigan, Sr.Mark Byrnes Grant KelleyTerry Hodge Gary PattonDonald Jernigan

Budget, Finance, and Investment Committee:

Joyce Ealy, Chairman Robert PeayBob Bullen Steve SandlinAnthony Johnson Doug ShaferWill Jordan

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FINANCIAL SECTION

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STATE OF TENNESSEE COMPTROLLER OF THE TREASURY

DEPARTMENT OF AUDIT DIVISION OF COUNTY AUDIT

SUITE 1500 JAMES K. POLK STATE OFFICE BUILDING

NASHVILLE, TENNESSEE 37243-0269 PHONE (615) 401-7841

INDEPENDENT AUDITOR’S REPORT

September 21, 2005

Rutherford County Mayor and Board of County Commissioners Rutherford County, Tennessee To the County Mayor and Board of County Commissioners: We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Rutherford County, Tennessee, as of and for the year ended June 30, 2005, which collectively comprise Rutherford County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Rutherford County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the discretely presented Community Care of Rutherford County, Inc., which represent .08 percent and three percent, respectively, of the assets and revenues of the aggregate discretely presented component units; and the discretely presented Rutherford County Emergency Communications District, which represent one percent and .5 percent, respectively, of the assets and revenues of the aggregate discretely presented component units, as of June 30, 2005, and for the year then ended. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion on the financial statements, insofar as it relates to the amounts included for the discretely presented Community Care of Rutherford County, Inc., and the discretely presented Rutherford County Emergency Communications District, is based on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the

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amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Rutherford County, Tennessee, as of June 30, 2005, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated September 21, 2005, on our consideration of Rutherford County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. As described in Note V.B., Rutherford County has implemented Governmental Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures, which modifies the county’s disclosures for custodial credit risk and adds disclosures about other types of risk. Additionally, Rutherford County elected early to implement the provisions of GASB Statement No. 44, Economic Condition Reporting: The Statistical Section. This standard improves the understandability and usefulness of the statistical section of the comprehensive annual financial report. The management’s discussion and analysis on pages 19 through 29 and the budgetary comparison information on pages 97 through 101 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Rutherford County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Rutherford County School Department (a discretely presented component unit), miscellaneous schedules, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and

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the General Debt Service Fund, combining and individual fund financial statements of the Rutherford County School Department (a discretely presented component unit), and the miscellaneous schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on them. Very truly yours,

John G. Morgan Comptroller of the Treasury JGM/yu

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Rutherford County, Tennessee Management’s Discussion and Analysis

For the Year Ended June 30, 2005 As management for Rutherford County, Tennessee, we offer readers of the financial statements for Rutherford County, Tennessee, this narrative overview and analysis of the financial activities of the Rutherford County, Tennessee, government for the fiscal year ended June 30, 2005. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights

• The liabilities of Rutherford County Government exceeded its assets at the close of the most recent fiscal year by $27,457 (net assets). Of this amount, $275,016 is long-term debt that is attributable to the Rutherford County Board of Education.

• The government’s total net assets decreased by $19,896. This decrease is directly attributable to the county’s issuance of debt for the school system.

• As of the close of the current fiscal year, Rutherford County, Tennessee’s governmental funds reported combined ending fund balances of $83,372, an increase of $14,509 in comparison with the prior year. Most of this total amount, $79,893, is available for spending at the government’s discretion (unreserved fund balance).

• At the end of the current fiscal year, unreserved fund balance for the General Fund was $16,936, or 32.19 percent of total General Fund expenditures.

• Rutherford County, Tennessee’s total debt increased by $40,675 (12.36%) during the current fiscal year. The key factor in this increase was the issuance of approximately $53.5 million bonded debt for school construction and equipment, and other general capital projects.

Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the basic financial statements of Rutherford County, Tennessee. The basic financial statements comprise three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of Rutherford County, Tennessee’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the assets and liabilities for Rutherford County, Tennessee, with the differences between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of Rutherford County, Tennessee, is improving or deteriorating.

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The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of Rutherford County, Tennessee, that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). Rutherford County, Tennessee’s governmental activities include general government; finance; administration of justice; public safety; public health and welfare; social, cultural, and recreational services; agriculture and natural resources; other operations; and highways/public works. The Rutherford County Government has no business-type activities to report. The government-wide financial statements include not only Rutherford County Government itself (known as the primary government), but also a legally separate school system for which the Rutherford County Government is financially accountable. These statements also include a legally separate E-911 district and a legally separate nursing home facility. Financial information for these component units is reported separately from the financial information presented for the primary government itself. The government-wide financial statements can be found on Exhibit A and Exhibit B of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Rutherford County, Tennessee, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of Rutherford County, Tennessee, can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

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Rutherford County, Tennessee, maintains 14 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the General Debt Service Fund, the General Capital Projects Fund and the Education Capital Projects Fund, all of which are considered to be major funds. Data from the other ten governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Rutherford County, Tennessee, adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on Exhibit C-1 and Exhibit D-1 of this report. Proprietary funds. Rutherford County maintains one type of proprietary fund. Internal service funds are an accounting devise used to accumulate and allocate costs internally among Rutherford County’s various functions. Rutherford County, Tennessee, uses internal service funds to account for the county’s self insured insurance funds (workers’ compensation, employee health insurance, and liability). Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on Exhibit E-1, Exhibit E-2, and Exhibit E-3 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support Rutherford County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on Exhibit F-1 and Exhibit F-2 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 47-94 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning Rutherford County’s major fund’s budgetary statement (General Fund). This required

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supplementary information has been presented in the required supplementary information section of this report. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the notes to the required supplementary information. Combining and individual fund statements and schedules can be found on Exhibit H-1 through Exhibit J-3 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of Rutherford County, Tennessee, liabilities exceed assets by $27,457 at the close of the fiscal year. The Constitution for the State of Tennessee only allows the local legislative body authorization to issue debt. Therefore, whenever the Rutherford County Board of Education requires additional money to fund school construction and equipment, the related debt must be issued by Rutherford County Government. As of June 30, 2005, Rutherford County had outstanding debt totaling $275,016 for capital purposes of the Rutherford County Board of Education, but the capital assets are reported in the financial statements of the Rutherford County Board of Education. Rutherford County has incurred the related liability significantly decreasing its unrestricted net assets without a corresponding increase in the county’s capital assets. Rutherford County, Tennessee Net Assets

2004 2005

Assets: Current and other assets $ 126,573 $ 151,095 Capital assets 207,145 206,259Total Assets $ 333,718 $ 357,354

Liabilities: Long-term liabilities outstanding $ (270,879) $ (306,075) Other Liabilities (70,400) (78,736)Total Liabilities $ (341,279) $ (384,811)

Net Assets: Invested in capital assets, net of related debt $ 166,358 $ 162,068 Restricted 47,856 65,024 Unrestricted (221,775) (254,549)Total Net Assets $ (7,561) $ (27,457)

Governmental Activities

By far the largest portion of Rutherford County’s net assets ($162,068) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. Rutherford County uses

23

these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Rutherford County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of Rutherford County, Tennessee’s net assets ($65,024) represents resources that are subject to external restrictions on how they may be used. Any balance remaining may be used to meet the government’s ongoing obligations to citizens and creditors. Rutherford County’s Changes in Net Assets Governmental activities. Governmental activities decreased Rutherford County Government‘s net assets by $19,896. Key elements of this decrease are as follows

2004 2005Revenues: Program revenues: Charges for services $ 41,190 $ 46,523 Operating grants and contributions 5,120 6,280 Capital grants and contributions 9,292 2,327 General revenues: Property taxes 45,206 47,535 Other taxes 19,298 20,374 Grants and contributions not restricted to specific programs 5,905 6,012 Unretricted investment earnings 1,065 2,500 Gain on disposal of capital asset 0 2,500 Other 504 325Total revenues $ 127,580 $ 134,376

Expenses: General government $ 2,244 $ 1,639 Finance 4,863 5,480 Administration of justice 4,970 4,753 Public safety 24,925 26,807 Public health and welfare 10,928 10,792 Social, cultural and recreation services 1,203 1,186 Agriculture and natural resources 971 1,440 Other operations 4,811 6,880 Highways 10,784 13,859 Education 40,140 67,167 Interest on long-term debt 13,498 13,123 Other debt service 0 1,146Total expenses $ 119,337 $ 154,272

GovernmentalActivities

24

2004 2005

Increase (decrease) in net assets $ 8,243 $ (19,896)Net assets, July 1 (18,922) (7,561)Prior period adjustment 3,118 0Net assets, June 30 $ (7,561) $ (27,457)


Expense and Program Revenues – Governmental Activities

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Genera

l Gov

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Financ

e

Admini

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on of

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ce

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Public

Hea

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are

Social

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ec. S

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s

Agricu

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Expense Revenue

25

Revenue by Source-Governmental Activities

35%

5%

2%

35%

3%

12%

4%

2%2%0%

Charges for service - 35% Operating grants & contributions - 5% Capital grants & contributions - 2%Property tax - 35% Local option sales tax - 3% Other local tax - 12%Unrestricted grants & contributions - 4% Unrestricted Investment Earnings - 2% Gain on disposal of capital asset - 2%Miscellaneous - 0%

Financial Analysis of the Government’s Funds As noted earlier, Rutherford County Government uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of Rutherford County Government’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing Rutherford County Government’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, Rutherford County Government’s governmental funds reported combined ending fund balances of $83,372, an increase of $14,509 in comparison with the prior year. Most of this total amount ($79,893) constitutes unreserved fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed to (1) to liquidate contracts and purchase orders of the prior period ($1,835), or (2) for a variety of other restricted purposes ($1,643). The General Fund is the chief operating fund of Rutherford County Government. At the end of the current fiscal year, unreserved fund balance was $16,936 while total fund balance reached $19,914. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 32.19 percent of total General Fund expenditures, while total fund balance represents 37.85 percent of that same amount. The fund balance of Rutherford County Government’s General Fund increased by $1,433 during the current fiscal year.

26

The General Debt Service Fund has a total fund balance of $30,267. The increase in fund balance during the current year in the General Debt Service Fund totaled $1,502. The increase to fund balance resulted from a significant increase in revenues derived from the county’s local development tax and greater investment returns. Interest expenditures and principal payments increased during the current period as a result of issuing additional debt. General Fund Budgetary Highlights During the fiscal year, there was an increase in appropriations from the original budget. Differences between the original budget and the final amended budget are summarized as follows:

2005General Government 162$ Finance 509Administration of Justice 206Public Safety 1,489Public Health & Welfare 161Social, Cultural, & Recreational 30Agriculture 5Other Operations 849Transfers Out 1,462Total Increase in Appropriations 4,873$

Net Change in Budget - Original vs. Amended

The largest increases were noted in public safety, other operations, and transfers out. During the fiscal year, the county’s adult detention center experienced extraordinary high inmate medical costs. Also, homeland security grants were awarded to the county after the budget was adopted. Under other operations and transfers out, the county appropriated additional monies to fund workers compensation expenses, employee’s medical claims, and capital projects. Other increases to the original budget were possible because of additional anticipated revenues. Those revenues included an upturn in sales tax collections, increase in development tax collections which funded several capital projects, and greater investment returns resulting from positive market conditions. At the close of the fiscal year expenditures were significantly less than budgetary estimates. Capital Asset and Debt Administration Capital Assets. Rutherford County Government’s investment in capital assets for its governmental funds as of June 30, 2005, amounts to $206,259 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, other capital assets (includes equipment), and infrastructure (roads,

27

highways, and bridges). The total decrease in Rutherford County Government’s investment in capital assets for the current fiscal year was .4 percent.

2004 2005

Land 67,107$ 66,266$ Buildings & improvements 44,986 49,099Infrastructure 84,304 83,661Other capital assets 6,464 5,924Construction in progress 4,284 1,309

Total 207,145$ 206,259$


Additional information on Rutherford County’s capital assets can be found in Note IV.C. on pages 63-65 of this report. Long-term debt. At the end of the current fiscal year, Rutherford County Government had total bonded debt outstanding of $302,245 and notes outstanding of $16,644. All debt is backed by the full faith and credit of the government.

Rutherford County, Tennessee, Outstanding Debt

Issuedfor:

2004 2005 2004 2005 2004 2005Notes 20,365$ 15,329$ 1,863$ 1,315$ 22,228$ 16,644$ Bonds 222,616 259,687 38,954 42,558 261,570 302,245

Total 242,981$ 275,016$ 40,817$ 43,873$ 283,798$ 318,889$

Total GovernmentalActivities

Rutherford CountyBoard of Education

GeneralGovernment

Rutherford County Government’s total debt increased by $35,091 (12.36%) during the current fiscal year. The key factor in this increase was the additional debt totaling $53,500 which was issued principally for the Rutherford County Board of Education. During the fiscal year, the government refinanced some of its existing debt to take advantage of favorable interest rates. The result is expected to decrease future debt service payments by $2,818. Currently state statutes do not limit the amount of general obligation debt a government entity may issue. Rutherford County Government maintains a “AA” rating from Standard & Poor’s and a “Aa2” from Moody’s for general obligation debt.

28

Additional information on the Rutherford County Government’s long-term debt can be found in Exhibit M-1 of this report. Economic Factors and Next year’s Budget and Rates • The average unemployment rate of Rutherford County for the fiscal year ended

June 2005 was 4.1 percent, which is the same average rate from the previous fiscal year. This compares favorably to the state’s average unemployment rate of 5.7 percent and the national average of 5.3 percent.

• Some of the significant business activity to Rutherford County includes:

1) $90 million joint venture near the Medical Center Parkway interstate interchange for a mall project.

2) The State of Tennessee’s approval of Stonecrest Medical Center’s certificate of need for a $4 million expansion.

3) Emerson Heating Products relocation of its division headquarters to Murfreesboro. 4) Asurion Corporation added 800 employees in Smyrna. 5) Rich Products will be adding 30 jobs with a capital investment of $11.9 million.

• The first floor occupancy rate of the government’s central business district has remained

at 95 percent for the past six years. • Inflationary trends in the region compare similar to national indices. All of these factors were considered in preparing the Rutherford County Government’s budget for the 2005-2006 fiscal year. During the current fiscal year, unreserved fund balance in the General Fund increased to $16,936. Rutherford County Government has appropriated $1,525 of this amount for spending in the 2005-2006 fiscal year. Unreserved fund balance in the General Debt Service Fund increased to $30,267. Of this amount, $1,734 has been appropriated for spending in the 2005-2006 fiscal year. Projected unreserved fund balance in the General Debt Service Fund as of June 30, 2006, is expected to be 80 percent of budgeted debt service expenditures. The operations of the Public Works Fund have been absorbed in the General Gund (storm-water) and the Highway/Public Works Fund (easement work). A reallocation of the county property tax was approved by the Board of Commissioners and is shown in the next table.

Fund 2004 Rate Increase

(Decrease) 2005 Rate

General Fund $0.595 $0 $0.595

Solid Waste 0.03 0 0.03

Highway/Public Works 0 .015 .015

Drug Control 0 0 0

General Purpose School 1.44 0 1.44

Public Works 0.015 (.015) 0

29

Fund 2004 Rate Increase

(Decrease) 2005 Rate

General Debt Service $ .72 $0 $ 0.72

Total County Property Tax $2.80 $0 $2.80 Request for Information This financial report is designed to provide a general overview of the Rutherford County Government’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, Rutherford County Government, Suite 201, Courthouse, Murfreesboro, TN 37130.

BASIC FINANCIAL STATEMENTS

Exhibit A

Rutherford County, TennesseeStatement of Net AssetsJune 30, 2005

PrimaryGovernment Component Units

Rutherford CommunityCounty Care of Emergency

Governmental School Rutherford CommunicationsActivities Department County, Inc. District

Cash $ 1,581,038 $ 0 $ 1,835,802 $ 2,435,363Equity in Pooled Cash and Investments 84,306,419 61,540,470 0 0Inventories 0 0 24,605 0Investments 169,062 0 0 0Accounts Receivable 9,189,524 426,125 1,108,377 155,812Allowance for Uncollectibles (906,162) 0 (100,000) 0Property Taxes Receivable 52,103,904 46,517,225 0 0Allowance for Uncollectible Property Taxes (863,003) (780,584) 0 0Accrued Interest Receivable 0 0 10,608 18,828Due from Other Governments 3,249,199 6,594,040 0 0Due from Component Units 1,391 0 0 0Prepaid Items 234,621 0 10,072 17,014Notes Receivable - Long-term 1,400,683 0 0 0Allowance for Doubtful Notes Receivable (1,037,302) 0 0 0Deferred Charges - Debt Issuance Costs 1,664,840 0 0 0Capital Assets: Assets Not Depreciated: Land 66,265,459 7,960,617 3,883 17,500 Construction in Progress 1,309,600 40,221,147 0 0 Assets Net of Accumulated Depreciation: Buildings and Improvements 49,099,532 221,251,307 0 1,098,078 Other Capital Assets 5,923,798 4,283,131 320,021 263,554 Infrastructure 83,660,898 0 0 0Total Assets $ 357,353,501 $ 388,013,478 $ 3,213,368 $ 4,006,149

Accounts Payable $ 497,003 $ 1,369,172 $ 123,821 $ 1,020Accrued Payroll 163,356 10,002,180 144,281 0Accrued Interest Payable 3,425,692 0 0 0Payroll Deductions Payable 95 0 731 0Deferred Revenue - Current Property Taxes 50,207,911 44,788,409 0 0Other Current Liabilities 46,253 0 160,946 0Noncurrent Liabilities: Due Within One Year 24,394,833 22,137 2,255 6,214 Due In More Than One Year (net of deferred amount on refunding and unamortized preimum on debt) 306,075,486 715,775 3,247 0Total Liabilities $ 384,810,629 $ 56,897,673 $ 435,281 $ 7,234

(Continued)

LIABILITIES

ASSETS

Exhibit A

Rutherford County, TennesseeStatement of Net Assets (Cont.)

PrimaryGovernment Component Units

Rutherford CommunityCounty Care of Emergency

Governmental School Rutherford CommunicationsActivities Department County, Inc. District

Invested in Capital Assets, Net of Related Debt $ 162,067,886 $ 0 $ 318,402 $ 0Invested in Capital Assets 0 273,716,202 0 1,379,132Restricted for: Capital Projects 14,397,305 38,446,494 0 0 Debt Service 31,323,064 0 0 0 Solid Waste/Sanitation 4,518,887 0 0 0 Adequate Facilities/Development 5,827,438 0 0 0 Highway/Public Works 6,033,497 0 0 0 Other Purposes 2,924,092 1,985,445 0 0Unrestricted (254,549,297) 16,967,664 2,459,685 2,619,783

Total Net Assets $ (27,457,128) $ 331,115,805 $ 2,778,087 $ 3,998,915

The notes to the financial statements are an integral part of this statement.

NET ASSETS

Exhibit B

Rutherford County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2005

Program Revenues Net (Expense) Revenue and Changes in Net AssetsPrimary Government Component Units

Operating Capital Rutherford CommunityCharges Grants Grants Total County Care of Emergencyfor and and Governmental School Rutherford Communications

Functions/Programs Expenses Services Contributions Contributions Activities Department County, Inc. District

Primary Government: General Government $ 1,638,923 $ 4,225,456 $ 16,380 $ 0 $ 2,602,913 $ 0 $ 0 $ 0 Finance 5,479,541 5,514,066 49,020 0 83,545 0 0 0 Administration of Justice 4,752,617 5,525,030 915,723 0 1,688,136 0 0 0 Public Safety 26,807,144 3,873,884 789,787 709,943 (21,433,530) 0 0 0 Public Health and Welfare 10,792,333 5,615,981 1,201,657 262,623 (3,712,072) 0 0 0 Social, Cultural and Rec Services 1,185,767 8,289 0 332,981 (844,497) 0 0 0 Agriculture & Natural Resources 1,439,522 126,150 0 0 (1,313,372) 0 0 0 Other Operations 6,880,570 0 0 0 (6,880,570) 0 0 0 Highways/Public Works 13,858,759 0 3,306,928 1,021,230 (9,530,601) 0 0 0 Education 67,166,917 21,633,813 0 0 (45,533,104) 0 0 0 Interest on Long-term Debt 13,123,313 0 0 0 (13,123,313) Other Debt Service 1,146,126 0 0 0 (1,146,126) 0 0 0

Total Primary Government $ 154,271,532 $ 46,522,669 $ 6,279,495 $ 2,326,777 $ (99,142,591) $ 0 $ 0 $ 0

Component Units: Rutherford County School Department $ 196,516,751 $ 258,330 $ 16,650,165 $ 43,554,061 $ 0 $ (136,054,195) $ 0 $ 0 Community Care of Rutherford County, Inc. 8,033,162 8,072,996 0 0 0 0 39,834 0 Emergency Communications District 774,492 1,120,010 0 0 0 0 0 345,518

Total Component Units $ 205,324,405 $ 9,451,336 $ 16,650,165 $ 43,554,061 $ 0 $ (136,054,195) $ 39,834 $ 345,518

(Continued)

Exhibit B

Rutherford County, TennesseeStatement of Activities (Cont.)

Program Revenues Net (Expense) Revenue and Changes in Net AssetsPrimary Government Component Units

Operating Capital Rutherford CommunityCharges Grants Grants Total County Care of Emergencyfor and and Governmental School Rutherford Communications

Functions/Programs Expenses Services Contributions Contributions Activities Department County, Inc. District

General Revenues:

Taxes: Property taxes levied for general purposes $ 22,520,119 $ 42,453,199 $ 0 $ 0 Property taxes levied for debt service 25,015,333 0 0 0 Local option sales tax 4,007,499 29,887,137 0 0 Other local taxes 16,366,139 3,708,668 0 0Grants & Contributions not restricted for specific programs 6,011,548 93,215,267 110,324 0Unrestricted Investment Earnings 2,500,527 459,682 23,094 30,871Gain on disposal of capital assets 2,500,000 0 0 0Miscellaneous 325,197 498,204 0 3,357Total General Revenues $ 79,246,362 $ 170,222,157 $ 133,418 $ 34,228

Change in net assets $ (19,896,229) $ 34,167,962 $ 173,252 $ 379,746Net assets, July 1, 2004 (7,560,899) 296,947,843 2,604,835 3,642,410Prior period adjustment 0 0 0 (23,241)

Net assets, June 30, 2005 $ (27,457,128) $ 331,115,805 $ 2,778,087 $ 3,998,915


Exhibit C-1

Rutherford County, TennesseeBalance SheetGovernmental FundsJune 30, 2005

Other TotalGeneral General Govern- Govern-

Debt Capital mental mentalGeneral Service Projects Funds Funds

ASSETS

Cash $ 133,817 $ 0 $ 0 $ 1,374,197 $ 1,508,014Equity in Pooled Cash and Investments 18,071,598 29,522,367 10,188,441 16,290,209 74,072,615Investments 0 0 169,062 0 169,062Accounts Receivable 4,358,472 440,736 4,000,000 136,619 8,935,827Allowance for Uncollectibles (906,162) 0 0 0 (906,162)Due from Other Governments 1,396,769 435,151 0 1,413,639 3,245,559Due from Other Funds 279,738 0 0 0 279,738Due from Component Units 1,391 0 0 0 1,391Property Taxes Receivable 22,837,320 27,541,842 0 1,724,742 52,103,904Allowance for Uncollectible Property Taxes (389,554) (444,688) 0 (28,761) (863,003)Prepaid Items 34,621 0 0 0 34,621Notes Receivable - Long-Term 0 0 0 1,400,683 1,400,683Allowance for Doubtful Notes Receivable 0 0 0 (1,037,302) (1,037,302)

Total Assets $ 45,818,010 $ 57,495,408 $ 14,357,503 $ 21,274,026 $ 138,944,947

LIABILITIES AND FUND BALANCES

LiabilitiesAccounts Payable $ 477,319 $ 0 $ 0 $ 11,184 $ 488,503Accrued Payroll 154,307 0 0 9,049 163,356Payroll Deductions Payable 95 0 0 0 95Due to Other Funds 0 0 0 277,599 277,599Due to Litigants, Heirs, and Others 27,074 0 0 0 27,074Current Liabilities Payable from Restricted Assets:

Customer Deposits Payable 19,179 0 0 0 19,179Deferred Revenue - Current Property Taxes 21,965,961 26,580,658 0 1,661,292 50,207,911Deferred Revenue - Delinquent Property Taxes 410,166 429,822 0 29,262 869,250Other Deferred Revenues 2,849,505 218,062 0 452,664 3,520,231

Total Liabilities $ 25,903,606 $ 27,228,542 $ 0 $ 2,441,050 $ 55,573,198

Fund BalancesReserved for Encumbrances $ 1,698,254 $ 0 $ 15,008 $ 122,206 $ 1,835,468Reserved for Alcohol and Drug Treatment 310,414 0 0 0 310,414Reserved for Litigation Tax - Jail, Workhouse, or Courthouse 529,300 0 0 0 529,300Reserved for Sexual Offender Registration 1,680 0 0 0 1,680Reserved for Computer System - Register 434,329 0 0 0 434,329Reserved for Long-Term Notes Receivable 0 0 0 363,381 363,381Reserved for Other General Purposes 4,270 0 0 0 4,270Unreserved, Reported In:

General Fund 16,936,157 0 0 0 16,936,157Special Revenue Funds 0 0 0 18,307,587 18,307,587Debt Service Funds 0 30,266,866 0 0 30,266,866Capital Projects Funds 0 0 14,342,495 39,802 14,382,297

Total Fund Balances $ 19,914,404 $ 30,266,866 $ 14,357,503 $ 18,832,976 $ 83,371,749

Total Liabilities and Fund Balances $ 45,818,010 $ 57,495,408 $ 14,357,503 $ 21,274,026 $ 138,944,947


Major FundsNonmajor

Funds

Exhibit C-2

Rutherford County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net AssetsJune 30, 2005

Amounts reported for governmental activities in the statement of net assets (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 83,371,749

(1) Capital assets used in governmental activities are not financial resources andtherefore are not reported in the funds. 206,259,287

(2) Internal service funds are used by management to charge the costs ofgeneral liability insurance, employee health insurance, and workers' compensationbenefits to individual funds. The assets and liabilities of the internal servicefunds are included in governmental activities in the statement of net assets. 5,555,005

(3) Long-term liabilities are not due in the current period and therefore arenot reported in the funds. (327,032,650)

(4) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the funds. 4,389,481

Net assets of governmental activities (Exhibit A) $ (27,457,128)


Exhibit D-1

Rutherford County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2005

Other General General Education Govern- Total

Debt Capital Capital mental Governmental General Service Projects Projects Funds Funds

RevenuesLocal Taxes $ 31,488,126 $ 28,981,863 $ 0 $ 0 $ 13,486,570 $ 73,956,559Licenses and Permits 1,641,354 0 0 0 37,700 1,679,054Fines, Forfeitures and Penalties 1,874,502 0 0 0 763,451 2,637,953Charges for Current Services 4,089,402 0 0 0 5,733,037 9,822,439Other Local Revenues 1,618,561 1,534,986 19,555 0 439,686 3,612,788Fees Received from County Officials 6,326,697 0 0 0 0 6,326,697State of Tennessee 5,034,379 0 0 0 3,863,857 8,898,236Federal Government 1,653,191 0 0 0 151,312 1,804,503Other Governments and Citizens Groups 452,372 0 0 0 0 452,372

Total Revenues $ 54,178,584 $ 30,516,849 $ 19,555 $ 0 $ 24,475,613 $ 109,190,601

ExpendituresCurrent:

General Government $ 4,058,602 $ 557,961 $ 0 $ 0 $ 714,502 $ 5,331,065Finance 3,676,640 0 0 0 1,775,173 5,451,813Administration of Justice 3,327,556 0 0 0 1,452,047 4,779,603Public Safety 25,104,974 0 0 0 805,036 25,910,010Public Health and Welfare 9,146,463 0 0 0 2,444,417 11,590,880Social, Cultural, and Recreational Services 1,085,767 0 0 0 0 1,085,767Agricultural and Natural Resources 485,942 0 0 0 932,152 1,418,094Other Operations 5,724,401 0 0 5,131,730 1,153,858 12,009,989Highways 0 0 0 0 6,477,902 6,477,902

Debt Service:Principal 0 17,719,449 0 0 0 17,719,449Interest 0 14,065,408 0 0 0 14,065,408Other Debt Service 0 622,495 523,631 0 0 1,146,126

Capital Projects 0 0 3,604,345 42,750,000 224,891 46,579,236Total Expenditures $ 52,610,345 $ 32,965,313 $ 4,127,976 $ 47,881,730 $ 15,979,978 $ 153,565,342

Excess (Deficiency) of RevenuesOver Expenditures $ 1,568,239 $ (2,448,464) $ (4,108,421) $ (47,881,730) $ 8,495,635 $ (44,374,741)

Other Financing Sources (Uses)Bonds Issued $ 0 $ 0 $ 5,618,270 $ 47,881,730 $ 0 $ 53,500,000Refunding Debt Issued 0 60,165,000 0 0 0 60,165,000

(Continued)

Major FundsNonmajor

Funds

Exhibit D-1


and Changes in Fund BalancesGovernmental Funds (Cont.)

Other General General Education Govern- Total

Debt Capital Capital mental Governmental General Service Projects Projects Funds Funds

Other Financing Sources (Uses) (Cont.)Premiums on Debt Issued $ 0 $ 4,740,330 $ 1,761,394 $ 0 $ 0 $ 6,501,724Proceeds From Sale of Capital Assets 0 0 4,000,000 0 0 4,000,000Transfers In 1,327,537 3,837,188 1,003,205 0 252,585 6,420,515Transfers Out (1,462,624) 0 (16,653) 0 (5,432,078) (6,911,355)Payments to Refunded Debt Escrow Agent 0 (64,792,077) 0 0 0 (64,792,077)

Total Other Financing Sources (Uses) $ (135,087) $ 3,950,441 $ 12,366,216 $ 47,881,730 $ (5,179,493) $ 58,883,807

Net Change in Fund Balances $ 1,433,152 $ 1,501,977 $ 8,257,795 $ 0 $ 3,316,142 $ 14,509,066Fund Balance, July 1, 2004 18,481,252 28,764,889 6,099,708 0 15,516,834 68,862,683

Fund Balance, June 30, 2005 $ 19,914,404 $ 30,266,866 $ 14,357,503 $ 0 $ 18,832,976 $ 83,371,749


Major FundsNonmajor

Funds

Rutherford County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2005

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit D-1) $ 14,509,066

(1) Governmental funds report capital outlays as expenditures. However, in the statementof activities the cost of those assets is allocated over their estimated useful livesand reported as depreciation expense. This is the amount by which capital outlaysexceeded depreciation in the current period. 8,903,331

(2) The net effect of various miscellaneous transactions involving capital assets(sales, trade-ins, and donations) is to decrease net assets. (9,789,065)

(3) Revenues in the statement of activities that do not provide current financial resourcesare not reported as revenues in the funds. 189,720

(4) The issuance of long-term debt (e.g., bonds, notes, leases) provides current financialresources to governmental funds, while the repayment of the principal of long-termdebt consumes the current financial resources of governmental funds. Neithertransaction, however, has any effect on net assets. Also, governmental funds reportthe effect of issuance costs, premiums, discounts, and similar items when debt isfirst issued, whereas these amounts are deferred and amortized in the statementof activities. This amount is the net effect of these differences in the treatmentof long-term debt and related items. (36,653,213)

(5) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and, therefore, are not reported as expenditures ingovernmental funds. (192,249)

(6) Internal service funds are used by management to charge the costs of general liability insurance and employee insurance and workers' compensation benefits to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 3,136,181

Change in net assets of governmental activities (Exhibit B) $ (19,896,229)


Exhibit D-2

Exhibit E-1

Rutherford County, TennesseeStatement of Net AssetsProprietary FundsJune 30, 2005

GovernmentalActivities -

InternalServiceFunds

ASSETS

Current Assets: Cash $ 73,024 Equity in Pooled Cash and Investments 10,233,804 Accounts Receivable 253,697 Due from Other Governments 3,640 Prepaid Items 200,000Total Assets $ 10,764,165

LIABILITIES

Current Liabilities: Accounts Payable $ 8,500

Claims and Judgements Payable 5,198,521Due to Other Funds 2,139

Total Liabilities $ 5,209,160

NET ASSETS

Unrestricted $ 5,555,005

Total Net Assets $ 5,555,005


Exhibit E-2

Rutherford County, TennesseeStatement of Revenues, Expenses, and Changes in Net AssetsProprietary FundsFor the Year Ended June 30, 2005


Internal ServiceFunds

Operating Revenues Charges for Current Services: Self-Insurance Premiums/Contributions $ 24,546,903 Other Local Revenues: Retirees' Insurance Payments 958,463 Cobra Insurance Payments 57,451 Insurance Recovery 1,401,778Total Operating Revenues $ 26,964,595

Operating Expenses Employee Benefits Handling Charges & Administrative Costs $ 544,546 Bank Charges 570 Other Supplies and Materials 1,734 Building Improvements 20,357 Data Processing Equipment 6,676 Consultants 12,579 Contracts with Private Agencies 839,489 Legal Services 1,002 Drug and Medical Supplies 18,559 Premium on Corporate Surety Bonds 1,116 Dues and Memberships 192,372 Other Contracted Services 81,765 Excess Risk Insurance 1,069,703 Medical Claims 21,787,587 Liability Claims 171,458 Worker's Compensation Insurance 13,613 Data Processing Supplies 972 Other Self-Insured Claims 1,818,791 Other Charges 47,150Total Operating Expenses $ 26,630,039Operating Income (Loss) $ 334,556

Nonoperating Revenues (Expenses) Miscellaneous Refunds $ 120,785Total Nonoperating Revenues (Expenses) $ 120,785

Income (Loss) Before Contributions and Transfers $ 455,341Contributions 2,190,000Transfers In 690,000Transfers Out (199,160)

Change in Net Assets $ 3,136,181Net Assests, July 1, 2004 2,418,824

Nets Assets, June 30, 2005 $ 5,555,005


Exhibit E-3

Rutherford County, TennesseeStatement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2005

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 25,789,904 Payment to suppliers (3,043,811) Claims Paid (23,194,211) Insurance Recovery 1,401,778 Other Receipts (Payments) 120,785Net Cash Provided By (Used In) Operating Activities $ 1,074,445

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Contributions $ 2,190,000 Transfers to Other Funds (199,160) Transfers from Other Funds 690,000Net Cash Provided By (Used For) Noncapital Financing Activities $ 2,680,840

Net Increase (Decrease) In Cash And Cash Equivalents $ 3,755,285Cash And Cash Equivalents, July 1, 2004 6,551,543

Cash And Cash Equivalents, June 30, 2005 $ 10,306,828

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) $ 334,556 Miscellaneous Refunds 120,785 Adjustments to Reconcile Net Operating Income (Loss) to Net Cash Provided by (Used In) Operating Activities: Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 226,389 (Increase) Decrease in Due From Other Governments 3,450 (Increase) Decrease in Advances to Other Funds (200,000) Increase (Decrease) in Accounts Payable 8,392 Increase (Decrease) in Claims and Judgements Payable 587,902 Increase (Decrease) in Due to Other Funds (6,415) Increase (Decrease) in Due to Component Units (614)

Net Cash Provided By (Used In) Operating Activities $ 1,074,445


Funds


InternalService

Exhibit F-1

Rutherford County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2005

ASSETS

Cash $ 5,813,827Equity in Pooled Cash and Investments 230,012Investments 224,902Accounts Receivable 16,278Due from Other Governments 5,357,408Taxes Receivable 8,696,098Allowance for Uncollectible Taxes (145,925)Total Assets $ 20,192,600

LIABILITIES

Due to Other Taxing Units $ 14,100,757Due to Joint Ventures 36,836Due to Litigants, Heirs, and Others 6,055,007Total Liabilities $ 20,192,600


AgencyFunds

Exhibit F-2

Rutherford County, TennesseeStatement of Changes in Fiduciary Net AssetsFiduciary FundFor the Year Ended June 30, 2005

OtherEmployee

BenefitTrustFund

FlexibleBenefits

Fund

ADDITIONS

Charges for Services Other Employee Benefit Charges/Contributions $ 79,950Total Additions $ 79,950

DEDUCTIONS

Employee Benefits Other Self-Insured Claims $ 90,348 Contributions 16,399Total Deductions $ 106,747

Change in Net Assets $ (26,797)Net Assets, July 1, 2004 26,797

Net Assets, June 30, 2005 $ 0


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RUTHERFORD COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2005

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Rutherford County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments. The following are the more significant accounting policies of Rutherford County:

A. Reporting Entity

Rutherford County is a public municipal corporation governed by an elected 21-member board. As required by GAAP, these financial statements present Rutherford County (the primary government) and its component units. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county.

Blended Component Units – There are no legally separate component units of Rutherford County that meet the criteria for being reported as part of the primary government by the blending method.

Discretely Presented Component Units – The following entities meet the criteria for discretely presented component units of the county. They are reported in separate columns in the government-wide financial statements to emphasize that they are legally separate from the county.

The Rutherford County School Department operates the public school system in the county, and the voters of Rutherford County elect its board. The School Department is fiscally dependent on the county because it may not issue debt without county approval, and its budget and property tax levy are subject to the County Commission’s approval. The School Department’s taxes are levied under the taxing authority of the county and are included as part of the county’s total tax levy.

Community Care of Rutherford County, Inc., provides nursing care to the citizens of Rutherford County, and the Rutherford County Commission appoints its governing body. Patient charges provide the majority of the revenues for the entity. Before the issuance of debt instruments, the entity must obtain the County Commission’s approval.

The Rutherford County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Rutherford County, and the Rutherford County Commission appoints its governing body. The district is

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funded primarily through a service charge levied on telephone services. Before the issuance of most debt instruments, the district must obtain the County Commission’s approval. The Rutherford County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the Rutherford County School Department are included in this report as listed in the table of contents. Complete financial statements of Community Care of Rutherford County, Inc., and the Rutherford County Emergency Communications District can be obtained from their administrative offices at the following addresses:

Administrative Offices: Community Care of Rutherford County, Inc. 901 County Farm Road Murfreesboro, TN 37130 Rutherford County Emergency Communications District 591 Fortress Blvd. Murfreesboro, TN 37128 Related Organization – The Rutherford County Industrial Development Board is a related organization of Rutherford County. The County Commission’s Steering Committee nominates and the Rutherford County Commission confirms the board members, but the county’s accountability for the organization does not extend beyond making the appointments.

B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. However, the primary government of Rutherford County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Rutherford County School Department component unit only reports governmental activities in the government-wide financial statements. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or

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directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Rutherford County issues all debt for the discretely presented Rutherford County School Department. Net debt issues ($42,750,000) were contributed by the county to the School Department for the year ended June 30, 2005. Separate financial statements are provided for governmental funds, proprietary funds (internal service), and fiduciary funds. The internal service funds are reported with the governmental activities in the government-wide financial statements, and the fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds and fiduciary fund financial statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Rutherford County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Rutherford County reports three proprietary funds (internal service funds). It has no enterprise funds to report. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. The internal service funds and the fiduciary funds in total are reported in single columns by fund type. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay

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liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Rutherford County considers grant and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash.

Proprietary fund and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Rutherford County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. General Capital Projects Fund – This fund is used to account for general capital expenditures of the county. Education Capital Projects Fund – This fund accounts for debt issued by Rutherford County that is subsequently contributed to the discretely presented Rutherford County School Department for construction and renovation projects.

Additionally, Rutherford County reports the following fund types:

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Special Revenue Funds – These funds account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

Internal Service Funds – These funds, the Self-Insurance Fund, the Employee Insurance - Health Fund, and the Workers’ Compensation Fund are used to account for the county’s self-insured general liability insurance, health, and workers’ compensation programs. Premiums charged to the various county funds and employee payroll deductions are placed in these funds for the payment of claims. Other Employee Benefit Trust Fund – The Flexible Benefits Fund is used to account for operations of the flexible benefits program for Rutherford County employees. The primary source of resources is employees’ payroll deductions. Agency Funds – These funds account for amounts collected in an agency capacity by the constitutional officers, local sales taxes received by the state to be forwarded to the various cities in Rutherford County, the city school system’s share of educational revenues, and assets held in a custodial capacity for a regional planning agency. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

The discretely presented Rutherford County School Department reports the following major governmental funds:

General Purpose School Fund – This fund is the primary operating fund for the School Department. It is used to account for general operations of the School Department. Other Capital Projects Fund – This fund is primarily used to account for the receipt of debt issued by Rutherford County and contributed to the School Department for building construction and renovations.

Additionally, the Rutherford County School Department reports the following fund types:

Special Revenue Fund – The School Federal Projects Fund is used to account for restricted federal revenues which must be expended on specific education programs.

Private-purpose Trust Fund – The Endowment Fund is used to account for resources legally held in trust to fund a scholarship at a local high school. Earnings on invested resources may be used to fund

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the scholarship, but the principal of the fund is required to be maintained intact.

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. The county has three proprietary funds, internal service funds, used to account for self-insured liability, employees’ health insurance, and workers’ compensation programs. Operating revenues and expenses generally result from providing services in connection with the funds’ principal ongoing operations. The principal operating revenues of the county’s internal service funds are charges for services. Operating expenses for the internal service funds include administrative expenses, liability insurance claims, and employee benefits.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted revenues first, then unrestricted resources as they are needed.

D. Assets, Liabilities, and Net Assets or Equity

1. Deposits and Investments

For purposes of the statement of cash flows, cash includes demand deposits and cash on deposit with the county trustee.

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; the county’s own legally issued bonds or notes; the State Treasurer’s Investment Pool; and repurchase agreements. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Rutherford County School Department. Each fund’s portion of this pool is displayed on its balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the General, General Debt Service, and General Purpose School Funds. In addition, investments are held separately by several of the county’s funds. Rutherford County and the Rutherford County School Department have adopted a policy of reporting U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when

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purchased on the balance sheet at amortized cost. Certificates of deposit and investments in the State Treasurer’s Investment Pool are reported at cost. The State Treasurer’s Investment Pool is not registered with the Securities and Exchange Commission (SEC) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost rather than fair value to report net assets to compute share prices if certain conditions are met. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables

Activity between funds for unremitted current collections or that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either due to/from other funds (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Accounts receivable in the General Fund are 72 percent ambulance receivables and 28 percent other receivables. All ambulance and property taxes receivable are shown with an allowance for uncollectibles. Ambulance receivables allowance for uncollectibles is based on historical collection data. The allowance for uncollectible property taxes is equal to one percent of total taxes levied. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as deferred revenue as of June 30.

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Property taxes receivable are also reported as of June 30 for the taxes

that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet with offsetting deferred revenue to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available.

Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

Current liabilities payable from restricted assets (customer deposits payable) reflected in the primary government funds represent deposits placed with Rutherford County for building codes certificates of occupancy ($19,179).

3. Prepaid Items

Using the consumption method, Rutherford County had prepaid postage totaling $34,621 in the General Fund and prepaid insurance premiums totaling $200,000 in the Employee Insurance – Health Fund at June 30, 2005.

4. Capital Assets

Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $5,000 (infrastructure $50,000) or more and an estimated useful life of more than two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.

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Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and Improvements 50Other Fixed Assets 6 - 20Infrastructure: Roads 75 Bridges 50

5. Compensated Absences

The county’s and School Department’s policies permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since their policies do not pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide statements for the county and its discretely presented component units. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements.

6. Long-term Obligations

In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities statement of net assets. Debt premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the debt using the straight-line method. Debt issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

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Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences, claims and judgments, and landfill closure/postclosure care costs are recognized to the extent that the liabilities have matured (come due for payment) each period.

7. Net Assets and Fund Equity

In the government-wide financial statements and the proprietary funds in the fund financial statements, equity is classified as net assets and displayed in three components:

a. Invested in capital assets, net of related debt – Consists of capital

assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net assets – Consists of net assets with constraints

placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net assets – All other net assets that do not meet the

definition of restricted or invested in capital assets, net of related debt.

As of June 30, 2005, Rutherford County had $275,016,959 in outstanding debt for capital purposes for the discretely presented Rutherford County School Department. The debt is a liability of Rutherford County, but the capital assets acquired are reported in the financial statements of the School Department. Therefore, Rutherford County has incurred a liability significantly decreasing its unrestricted net assets with no corresponding increase in the county’s capital assets. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. The following table reflects designations on June 30, 2005:

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Fund/Purpose Amount

General: Animal shelter $ 10,155 Agriculture extension 21,741Adequate Facilities/Development Tax: Flood mitigation grant match 618,925 General debt service 975,000 Motlow College project 100,000General Capital Projects: Beasley Road connector 169,062General Purpose School: Attendance software 167,657

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets

Primary Government

Exhibit C-2 presents a reconciliation between fund balance – total governmental funds and net assets – governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that long-term liabilities, including debt payable, are not due and payable in the current period and therefore are not reported in the funds. The details of the $327,032,650 difference are as follows:

Bonds payable $ (302,245,000)Deferred charges - issuance costs (to be amortized over life of debt) 1,664,840Deferred amount on refunding 3,834,006Deferred revenue - premium on debt (to be amortized over life of debt) (6,934,854)Accrued interest payable (3,425,692)Landfill closure/postclosure care costs (313,522)Notes payable (16,643,534)Compensated absences (2,968,894)

Net adjustment to reduce fund balance - total governmental funds to arrive at net assets - governmental activities $ (327,032,650)

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B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities

Primary Government

Exhibit D-2 presents a reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this $8,903,331 difference are as follows:

Capital outlay $ 13,739,443Depreciation expense (4,836,112)

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 8,903,331

Another element of that reconciliation states that the net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net assets. The details of this $9,789,065 difference are as follows:

Donations of capital assets $ 1,021,230Capital assets disposals (10,810,295)

Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (9,789,065)

Another element of that reconciliation states that the issuance of long-term debt (e.g., bonds, notes, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The details of this $36,653,213 difference are as follows:

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Debt issued or incurred: Issuance of general obligation bonds $ (113,665,000)Related Items: Premium on debt to defer (6,501,724) Amortization of premium 260,463 Current debt issuance costs to defer 933,108 Amortization of issuance costs (72,593) Amortization of deferred amount on refunding (122,769) Deferred amount on refunding 3,940,853 Payment to refunding agent 60,855,000Principal repayments: Bonds 12,135,000 Notes 5,584,449

Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (36,653,213)

Another element of that reconciliation states that some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. The details of this $192,249 difference are as follows:

Net change in compensated absences $ 56,834Net change in landfill closure/postclosure care costs 94,897Net change in accrued interest on bonds (411,860)Net change in accrued interest on notes 67,880

Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ (192,249)

Discretely Presented Rutherford County School Department The discretely presented Rutherford County School Department’s Exhibit L-4 presents a reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this $16,537,288 difference are as follows:

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Capital outlay $ 22,677,670Depreciation expense (6,140,382)

Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 16,537,288

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the District Attorney General Fund (special revenue fund) and the Constitutional Officers – Fees Fund (special revenue fund) which are not budgeted, and the capital projects funds, which adopt project length budgets. All annual appropriations lapse at fiscal year end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year.

The budgetary level of control is at the major category level established by the State Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor, County Attorney, etc.). Management may make revisions within major categories, but only the governing body may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

The county's budgetary basis of accounting is consistent with generally accepted accounting principles (GAAP), except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and the GAAP basis is presented on the face of each budgetary statement.

B. Net Assets Deficit

The Workers’ Compensation Fund (Internal Service Fund) had a net assets deficit of $395,906 at June 30, 2005. This net assets deficit resulted from an increase in workers’ compensation claims and estimates. Funding for these

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future expenditures is expected to be received from the General and General Purpose School Funds.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Rutherford County and the Rutherford County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, depositing, and investing most county funds. Each fund's portion of this pool is displayed on the balance sheets or statements of net assets as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net assets represents nonpooled amounts held separately by individual funds.

Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Public fund accounts covered by the pool are considered to be insured for purposes of custodial credit risk disclosure.

For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county.

Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state director of Local Finance and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the market value of the securities on the day of purchase.

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Investment Balances. As of June 30, 2005, Rutherford County had the following investments carried at fair value or cost. All investments are in the State Treasurer’s Investment Pool. Separate disclosures concerning pooled investments cannot be made for Rutherford County and the discretely presented Rutherford County School Department since both pool their deposits and investments through the county trustee.

Fair ValueInvestment Maturities or Cost

POOLED: State Treasurer's Investment Pool Daily $ 101,081,414

NONPOOLED: Rutherford County Constitutional Officers - Agency Fund: Clerk and Master: State Treasurer's Investment Pool Daily $ 224,902

General Capital Projects Fund: State Treasurer's Investment Pool Daily 169,062

Total Nonpooled $ 393,964

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. State statutes limit the maturities of certain investments, as previously disclosed. Rutherford County does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes limit the ratings of certain investments as previously explained. Rutherford County has no investment policy that would further limit its investment choices. As of June 30, 2005, Rutherford County’s investment in the State Treasurer’s Investment Pool was unrated.

B. Notes Receivable

Revenues from loan payments for property sold by the Industrial/Economic Development Fund are recognized on the cash basis. The county and Wherry Housing have reached a payment agreement through bankruptcy court on this note. The Industrial/Economic Development Fund had a long-term note receivable of $1,037,302 from Wherry Housing on June 30, 2005.

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The Industrial/Economic Development Fund had a long-term note receivable of $363,381 on June 30, 2005, from financing projects for the Smyrna-Rutherford County Airport (Joint Venture).

The General Purpose School Fund advanced the School Department’s Other Capital Projects Fund $1,080,000 to purchase land and pay for engineering/architects fees for school construction projects.

C. Capital Assets

Capital asset activity for the year ended June 30, 2005, was as follows:

Primary Government Governmental Activities:

Balance Balance7-1-04 Increases Decreases 6-30-05

Capital Assets Not Depreciated:

Land $ 19,002,932 $ 0 $ (1,500,000) $ 17,502,932Right-of-ways 48,104,000 5,325,852 (4,667,325) 48,762,527Construction in Progress 4,283,664 1,396,945 (4,371,009) 1,309,600

Total Capital Assets Not Depreciated $ 71,390,596 $ 6,722,797 $ (10,538,334) $ 67,575,059

Capital Assets Depreciated:

Buildings and Improvements $ 59,004,881 $ 5,531,853 $ 0 $ 64,536,734Infrastucture 109,700,146 1,047,615 (253,630) 110,494,131Other Capital Assets 21,536,248 1,458,408 (1,183,452) 21,811,204

Total Capital Assets Depreciated $ 190,241,275 $ 8,037,876 $ (1,437,082) $ 196,842,069

Less Accumulated Depreciation For:

Buildings and Improvements $ 14,018,155 $ 1,419,047 $ 0 $ 15,437,202Infrastucture 25,396,268 1,498,927 (61,962) 26,833,233Other Capital Assets 15,072,427 1,918,138 (1,103,159) 15,887,406

Total Accumulated Depreciation $ 54,486,850 $ 4,836,112 $ (1,165,121) $ 58,157,841

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Governmental Activities (Cont.):


Total Capital Assets Depreciated, Net $ 135,754,425 $ 3,201,764 $ (271,961) $ 138,684,228

Governmental Activities Capital Assets, Net $ 207,145,021 $ 9,924,561 $ (10,810,295) $ 206,259,287

Depreciation expense was charged to functions of the primary government as follows:

Governmental Activities:

General Government $ 468,416Finance 84,201Administration of Justice 9,562Public Safety 1,536,507Public Health and Welfare 912,198Agriculture & Natural Resources 14,779Other Operations 6,238Highways 1,804,211

Total Depreciation Expense - Governmental Activities $ 4,836,112

Discretely Presented Rutherford County School Department Governmental Activities:


Capital Assets Not Depreciated:

Land $ 7,862,960 $ 97,657 $ 0 $ 7,960,617Construction in Progress 28,952,141 16,031,714 (4,762,708) 40,221,147

Total Capital Assets Not Depreciated $ 36,815,101 $ 16,129,371 $ (4,762,708) $ 48,181,764

C i l A

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Governmental Activities (Cont.):


Capital Assets Depreciated:

Buildings and Improvements $ 264,407,952 $ 5,970,326 $ 0 $ 270,378,278Other Capital Assets 9,689,093 577,973 (241,424) 10,025,642

Total Capital Assets Depreciated $ 274,097,045 $ 6,548,299 $ (241,424) $ 280,403,920

Less Accumulated Depreciation For:

Buildings and Improvements $ 43,765,017 $ 5,361,954 $ 0 $ 49,126,971Other Capital Assets 5,201,419 778,428 (237,336) 5,742,511

Total Accumulated Depreciation $ 48,966,436 $ 6,140,382 $ (237,336) $ 54,869,482

Total Capital Assets Depreciated, Net $ 225,130,609 $ 407,917 $ (4,088) $ 225,534,438

Governmental Activities Capital Assets, Net $ 261,945,710 $ 16,537,288 $ (4,766,796) $ 273,716,202

Depreciation expense totaling $6,140,382 was charged to the discretely presented Rutherford County School Department.

D. Construction Commitments

At June 30, 2005, the county had uncompleted construction contracts of approximately $14,883 in the Adequate Facilities/Development Tax Fund and $5,047,714 for the school building program in the discretely presented Rutherford County School Department. Funding has been received for these future expenditures.

E. Interfund Receivables, Payables, and Transfers

The composition of interfund balances as of June 30, 2005, is as follows:

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Due to/from other funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 277,599 General Internal service 2,139

School Department: General Purpose School Nonmajor governmental 166,606

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. Interfund loans to/from other funds:


School Department: General Purpose School Other Capital Projects $ 1,080,000

The discretely presented General Purpose School Fund advanced the School Department’s Other Capital Projects Fund $1,080,000 for the purchase of land and engineering/architects fees for construction projects. Due to/from primary government and component units:


Primary government: Component unit: General Community Care of Rutherford County, Inc.

Rutherford County, Inc. $ 1,391

Interfund Transfers:

Interfund transfers for the year ended June 30, 2005, consisted of the

following amounts:

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Primary Government

General GeneralDebt Capital Nonmajor Internal

General Service Projects Governmental ServiceTransfers Out Fund Fund Fund Funds Funds

General Fund $ 0 $ 0 $ 680,000 $ 180,924 $ 601,700General Capital Projects Fund 0 0 0 16,653 0Nonmajor governmental funds 1,128,377 3,837,188 323,205 55,008 88,300Internal Service Funds 199,160 0 0 0 0

Total $ 1,327,537 $ 3,837,188 $ 1,003,205 $ 252,585 $ 690,000

Transfers In

Discretely Presented Rutherford County School Department

General Other Purpose CapitalSchool Projects

Transfers Out Fund Fund

General Purpose School Fund $ 0 $ 4,265,148Nonmajor governmental funds 501,181 0

Total $ 501,181 $ 4,265,148

Transfers In

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and to use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

F. Long-term Debt

Primary Government General Obligation Bonds and Notes The county issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. General obligation bonds and capital outlay notes outstanding were issued for original terms of up to 25 years for bonds and up to 12 years for notes. Repayment terms are

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generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes included in long-term debt as of June 30, 2005, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2005, are as follows:

Original

Interest Amount of BalanceType Rate Issue 6-30-05

General Obligation Bonds 2.5 to 6.5% $ 290,380,066 $ 159,415,066General Obligation Bonds - Refunding 2.25 to 5.25 181,664,934 142,829,934Capital Outlay Notes 0 to 6 39,980,079 16,643,534

The annual requirements to amortize all general obligation bonds and notes outstanding as of June 30, 2005, including interest payments, are as follows:

Year Ending Bonds NotesJune 30 Principal Interest Principal Interest

2006 $ 14,140,000 $ 13,696,086 $ 5,864,449 $ 1,072,4252007 12,660,000 13,062,036 9,854,085 693,7762008 21,490,000 12,515,629 925,000 55,5002009 19,060,000 11,584,079 0 02010 16,730,000 10,823,979 0 02011-2015 94,440,000 42,284,318 0 02016-2020 75,125,000 20,957,559 0 02021-2025 32,950,000 6,907,012 0 02026-2030 15,650,000 2,174,438 0 0

Total $ 302,245,000 $ 134,005,136 $ 16,643,534 $ 1,821,701

There is $30,266,866 available in the General Debt Service Fund to service long-term debt. General bonded debt per capita amounted to $1,660, based on the 2000 federal census. Total debt per capita, including bonds and notes, amounted to $1,752, based on the 2000 federal census. Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2005, was as follows:

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Governmental Activities:Bonds

Balance, July 1, 2004 $ 261,570,000 $ 22,227,983Additions 113,665,000 0Deductions (72,990,000) (5,584,449)Balance, June 30, 2005 $ 302,245,000 $ 16,643,534

Balance Due Within One Year $ 14,140,000 $ 5,864,449

Notes

CompensatedAbsences

Balance, July 1, 2004 $ 3,025,728 $ 408,419Additions 108,541 0Deductions (165,375) (94,897)Balance, June 30, 2005 $ 2,968,894 $ 313,522

Balance Due Within One Year $ 89,067 $ 142,500

Claims andJudgments

Balance, July 1, 2004 $ 4,610,619Additions 23,606,378Deductions (23,018,476)

Balance, June 30, 2005 $ 5,198,521

Balance Due Within One Year $ 4,158,817

LandfillClosure/

PostclosureCare Costs

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2005 $ 327,369,471Less: Due Within One Year (24,394,833)Add: Unamortized Premium on Debt 6,934,854Less: Deferred Amount on Refunding (3,834,006)

Noncurrent Liabilities - Due In More Than One Year - Exhibit A $ 306,075,486

The internal service funds primarily serve the governmental funds. Accordingly, long-term liabilities for the internal service funds are included as part of the above totals for governmental activities. At year end, $5,198,521 of claims and judgments are included in the above amounts.

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Compensated absences payable will be paid from the employing funds, primarily the General Fund, the Solid Waste/Sanitation Fund, and the Highway/Public Works Fund. Landfill closure/postclosure care costs will be paid from the Solid Waste/Sanitation Fund.

Advance Refundings On November 1, 2004, Rutherford County advance refunded certain bond issues with a separate general obligation bond issue. The county issued $42,400,000 of general obligation refunding bonds to provide resources to purchase U.S. government securities that were placed in an irrevocable trust to generate resources for all future debt service payments of the refunded debt. As a result, the refunded bonds are considered defeased, and the liability has been removed from the county’s long-term debt. As a result of the advance refunding, total debt service payments over the next 16 years will be reduced by $2,073,189, and an economic gain (difference between the present value of the debt service payments of the refunded and refunding bonds) of $1,558,095 was obtained. On February 1, 2005, Rutherford County advance refunded certain bond issues with a separate general obligation bond issue. The county issued $17,765,000 of general obligation refunding bonds to provide resources to purchase U.S. government securities that were placed in an irrevocable trust to generate resources for all future debt service payments of the refunded debt. As a result, the refunded bonds are considered defeased, and the liability has been removed from the county’s long-term debt. As a result of the advance refunding, total debt service payments over the next 16 years will be reduced by $745,090, and an economic gain (difference between the present value of the debt service payments of the refunded and refunding bonds) of $554,193 was obtained.

Defeasance of Prior Debt In prior years, Rutherford County defeased certain outstanding general obligation bonds by placing the proceeds of the new bonds into an irrevocable trust to provide for all future debt service payments on the old bonds. The trustee is empowered and required to pay all principal and interest on the defeased bonds as originally scheduled. According, the trust accounts and the defeased bonds are not included in the county’s financial statements. At June 30, 2005, the following outstanding bonds are considered defeased:

Amount

1995 Capital Appreciation $ 23,055,0821996 Public Improvements 16,375,0002000 School Bonds 22,600,000

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Discretely Presented Rutherford County School Department

Changes in Long-term Liabilities Long-term liability activity for the discretely presented Rutherford County School Department for the year ended June 30, 2005, was as follows:

Governmental Activities:

CompensatedAbsences

Balance, July 1, 2004 $ 667,486Additions 643,987Deductions (573,561)Balance, June 30, 2005 $ 737,912

Balance Due Within One Year $ 22,137

Compensated absences will be paid from the employing funds, primarily the General Purpose School and School Federal Projects Funds.

G. Donor Restricted Endowments

The discretely presented Rutherford County School Department accounts for an endowment totaling $28,783 in a private-purpose trust fund, the Endowment Fund. The principal amount must remain intact, while interest earned on the principal funds a scholarship for the valedictorian of the senior class at Eagleville High School. During the year ended June 30, 2005, interest earned and expended totaled $346 with no resulting effect on net assets.

V. OTHER INFORMATION

A. Risk Management

Rutherford County and the School Department have chosen to establish the Self-Insurance Fund for liability risks. The Self-Insurance Fund is accounted for as an internal service fund where assets are set aside for claim settlements. The county and School Department are self-insured to a limit of $150,000 per claim for general liability claims and $25,000 per claim for automobile claims. The county and School Department obtained commercial insurance for claims beyond the above-noted amounts. The maximum liability the county can incur is $5,000,000 for general liability and $1,000,000 for automobile claims.

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Rutherford County has chosen to establish the Employee Insurance - Health Fund for risks associated with the employees’ health insurance plan. The Employee Insurance - Health Fund is accounted for as an internal service fund where assets are set aside for claim settlements. The county is self-insured to a limit of $100,000 per person per agreement year. The county carries no aggregate reinsurance coverage. Group life and accident insurance premiums paid to a private insurance company are also recorded in this fund. Rutherford County has chosen to establish the Workers’ Compensation Fund for risks associated with workers’ compensation claims. The Workers’ Compensation Fund is accounted for as an internal service fund where assets are set aside for claim settlements. The county is self-insured to a limit of $275,000 for a single claim except for Communicable Disease – Tuberculosis excluded, which is $350,000. All full-time employees of the primary government, the Smyrna-Rutherford County Airport (Joint Venture), and the discretely presented component units (Rutherford County School Department, Emergency Communications District, and Community Care of Rutherford County, Inc.) are eligible to participate in the Employee Insurance - Health Fund. All full-time employees of the primary government, the discretely presented Rutherford County School Department, and the discretely presented Emergency Communications District component units are eligible to participate in the Workers’ Compensation Fund. Premium charges are allocated to each fund that accounts for full-time employees. These charges are based on actuarial estimates of the amounts needed to pay prior- and current-year claims. Liabilities of the funds are reported when losses are probable and the amounts of the losses can be reasonably estimated. The Employee Insurance - Health Fund and the Workers’ Compensation Fund establish claims liabilities based on estimates of the ultimate cost of claims that have been reported but not settled, and of claims that have been incurred but not reported. Claims liabilities include incremental claim adjustment expenditures/expenses, if any. In addition, estimated recoveries, if any, on settled claims have been deducted from the liability for unpaid claims. The process used to compute claims liabilities does not necessarily result in an exact amount. Changes in the balance of claims liabilities during the past two fiscal years for the Employee Insurance - Health Fund and the Workers’ Compensation Fund are as follows:

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Employee Insurance - Health Fund

Beginning of Current-year Balance atFiscal Year Claims and Fiscal

Liability Estimates Payments Year-end

2003-04 $ 2,661,260 $ 19,463,057 $ (18,648,796) $ 3,475,5212004-05 3,475,521 21,787,587 (21,787,587) 3,475,521

Workers' Compensation Fund

Beginning of Current-year Balance atFiscal Year Claims and Fiscal

Liability Estimates Payments Year-end

2003-04 $ 1,874,845 460,886 (1,200,633) $ 1,135,0982004-05 1,135,098 1,818,791 (1,230,889) 1,723,000

B. Accounting Changes

During the year, Rutherford County adopted the provisions of Governmental Accounting Standards Board Statement No. 40, Deposit and Investment Risk Disclosures. These provisions modified the county’s previous custodial risk disclosures for deposits and investments and related collateral. These provisions also added disclosures about other types of risk, including credit risk, interest rate risk, foreign currency risk, and concentrations of credit risk. Governments are also required to provide brief disclosures about their deposit and investment policies that are related to any of the risks required to be disclosed. Additionally, Rutherford County elected early to implement the provisions of Governmental Accounting Standards Board Statement No. 40, Economic Condition Reporting: The Statistical Section. This standard improves the understandability and usefulness of the statistical section of the comprehensive annual financial report.

C. Contingent Liabilities

During the year, the sheriff filed suit against the county mayor for additional departmental funding of approximately $10,000,000. This case is currently pending; however, the outcome could materially affect the financial statements of the county. The county is also involved in several other pending lawsuits. The county attorney estimates that the potential claims against the county not covered by insurance resulting from such litigation would not materially affect the financial statements of the county.

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D. Change in Administration

Tommy Sanford, assessor of property, left office August 31, 2004, and was succeeded by John Barbee.

E. Landfill Closure/Postclosure Care Costs

State and federal laws and regulations require the county to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. These closure and postclosure care costs generally are paid near or after the date that the landfill stops accepting waste. Rutherford County closed its class 1 landfill in April 1993 and has contracted its waste management to a private vendor. Rutherford County still operates a class three construction landfill, which accepts the kinds of waste not subject to state and federal regulations for closure and postclosure care costs. The Solid Waste/Sanitation Fund (Special Revenue Fund) reports the operations of the class three construction landfill and the closure and postclosure care costs of the closed class one landfill as expenditures in each period in which they are incurred. The $313,522 reported as landfill closure and postclosure care liability at June 30, 2005, represents the net amount reported to date based on the use of 100 percent of the estimated capacity of the landfill. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

F. Joint Ventures

The Rutherford County Library System is jointly owned by Rutherford County and the Cities of Murfreesboro and Smyrna and is operated by an appointed board. The board comprises 14 members, seven of whom are appointed by the Rutherford County Commission, with two being residents of Smyrna. The remaining seven members are appointed by the City of Murfreesboro. Rutherford County has control over budgeting and financing the joint venture only to the extent of representation by the seven board members appointed. Rutherford County contributed $786,000 to the operations of the libraries during the year ended June 30, 2005. Rutherford County is a participant with Cannon, Coffee, and Warren Counties in a multi-county Municipal Solid Waste Planning Region. This entity was created to promote the preparation of municipal solid waste regional plans to effectively and efficiently manage solid waste. This entity is governed by a 13-member board comprising appointees from Cannon County (2), Coffee County (2), Rutherford County (3), Warren County (2), the City of Manchester (1), the City of McMinnville (1), the City of Murfreesboro (1), and the City of Woodbury (1). Funding is provided from member contributions and grants. There are no separately issued financial statements for the Municipal Solid Waste Planning Region. Rutherford County has been designated as the fiscal agent for the Planning Region and accounts for its

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activities through the Joint Venture Fund (Agency Fund), which is included in the financial statements of this report. The Smyrna-Rutherford County Airport is operated through a joint operations agreement between Rutherford County and the City of Smyrna, Tennessee. The agreement created a joint board of directors to manage the airport. The board comprises five members, two of whom are appointed by the Rutherford County Commission, two by the City of Smyrna, and one jointly appointed by Rutherford County and the City of Smyrna. Rutherford County has control over budgeting and financing the joint venture only to the extent of its representation by its board members. The Joint Parking Authority of Rutherford County was created by Rutherford County and the City of Murfreesboro to operate and maintain a jointly owned parking garage. The Joint Parking Authority comprises seven members, three of whom are appointed by Rutherford County, three by the City of Murfreesboro, and one jointly by the county mayor and the city mayor. Rutherford County has control over budgeting and financing the joint venture only to the extent of representation by the three board members appointed. This agency has yet to begin operations; therefore, there is no financial activity to report. The Rutherford County Chamber of Commerce Economic Development Council has been designated as the Joint Economic and Community Development Board for Rutherford County, the City of Murfreesboro, the Town of Smyrna, the City of LaVergne, and the Town of Eagleville. This designation was authorized by an interlocal agreement between the governments, as provided by Section 6-58-115(j), Tennessee Code Annotated (TCA). The purpose of this board is to foster communication relative to economic and community development between and among governmental entities, industry, and private citizens. If funding through the Rutherford County Chamber of Commerce is inadequate, the funding formula established by the Comprehensive Growth Plan, Section 6-58-101, et seq., TCA, shall be followed. Rutherford County has control over budgeting and financing the board through the county mayor or designee to the board. Separate financial statements are not prepared for the board; however, financial information may be obtained through the Rutherford County Chamber of Commerce. Rutherford County does not have an equity interest in any of the above-noted joint ventures. Complete financial statements for the Rutherford County Library System and the Smyrna-Rutherford County Airport can be obtained from their respective administrative offices at the following addresses:

Administrative Offices:

Rutherford County Library System

105 West Vine Street Murfreesboro, TN 37130

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Smyrna-Rutherford County Airport 660 Fitzhugh Blvd. Smyrna, TN 37167

G. Retirement Commitments

Plan Description Employees of Rutherford County are members of the Political Subdivision Pension Plan (PSPP), an agent multiple-employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service or at any age with 30 years of service. A reduced retirement benefit is available to vested members at the age of 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the system after July 1, 1979, become vested after five years of service, and members joining prior to July 1, 1979, were vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. Political subdivisions such as Rutherford County participate in the TCRS as individual entities and are liable for all costs associated with the operation and administration of their plan. Benefit improvements are not applicable to a political subdivision unless approved by the chief governing body. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the PSPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, TN 37243-0230 or can be accessed at www.treasury.state.tn.us. Copies of footnotes in PDF format can be accessed at http://www.treasury.state.tn.us/tcrs/PS/. Funding Policy Rutherford County has adopted a noncontributory retirement plan for its employees by assuming employee contributions up to five percent of annual covered payroll. The county is required to contribute at an actuarially determined rate; the rate for the fiscal year ended June 30, 2005, was 11.59 percent of annual covered payroll. The contribution requirement of plan members is set by state statute. The contribution requirement for Rutherford County is established and may be amended by the TCRS Board of Trustees.

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Annual Pension Cost For the year ended June 30, 2005, Rutherford County’s annual pension cost of $5,719,396 to TCRS was equal to the county’s required and actual contributions. The required contribution was determined as part of the July 1, 2003, actuarial valuation using the frozen entry age actuarial cost method. Significant actuarial assumptions used in the valuation include (a) rate of return on investment of present and future assets of 7.5 percent a year compounded annually, (b) projected salary increases of 4.75 percent (graded) annual rate (no explicit assumption is made regarding the portion attributable to the effects of inflation on salaries), (c) projected 3.5 percent annual increase in the Social Security wage base, and (d) projected post-retirement increases of three percent annually. The actuarial value of assets was determined using techniques that smooth the effect of short-term volatility in the market value of total investments over a five-year period. Rutherford County’s unfunded actuarial accrued liability is being amortized as a level dollar amount on a closed basis. The remaining amortization period at July 1, 2003, was 12 years.

Trend Information

Fiscal Year

Ended

Annual Pension

Cost(APC)

Percentage of APC

Contributed

Net Pension

Obligation

6-30-05 $5,719,396 100% $0 6-30-04 4,760,244 100 0 6-30-03 4,428,519 100 0

Required Supplementary Information Schedule of Funding Progress for Rutherford County (Dollar amounts in thousands) Actuarial Valuation

Date

Actuarial Value of Assets

(a)

Actuarial Accrued Liability

(AAL) (b)

Unfunded AAL

(UAAL)

(b) - (a)

Funded Ratio

(a/b)

Covered Payroll

(c)

UAAL as a Percentage of Covered

Payroll ((b-a)/c)

6-30-03 $66,122 $74,352 $8,230 88.93% $42,007 19.59% 6-30-01 54,975 63,583 8,608 86.46 37,515 22.95 6-30-99 44,166 49,184 5,018 89.80 31,939 15.71

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SCHOOL TEACHERS Plan Description Rutherford County contributes to the State Employees, Teachers, and Higher Education Employees Pension Plan (SETHEEPP), a cost-sharing multiple employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits to plan members and their beneficiaries. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service, or at any age with 30 years of service. A reduced retirement benefit is available to vested members who are at least 55 years of age or have 25 years of service. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the plan on or after July 1, 1979, are vested after five years of service. Members joining prior to July 1, 1979, are vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. A cost of living adjustment (COLA) is provided to retirees each July based on the percentage change in the Consumer Price Index (CPI) during the previous calendar year. No COLA is granted if the CPI increases less than one-half percent. The annual COLA is capped at three percent. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the SETHEEPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, Tennessee 37243-0230 or can be accessed at www.treasury.state.tn.us. Copies of footnotes in PDF format can be accessed at http://www.treasury.state.tn.us/tcrs/Schools/. Funding Policy Most teachers are required by state statute to contribute five percent of their salaries to the plan. The employer contribution rate for Rutherford County is established at an actuarially determined rate. The employer rate for the fiscal year ended June 30, 2005, was 5.5 percent of annual covered payroll. The employer contribution requirement for Rutherford County is established and may be amended by the TCRS Board of Trustees. The employer’s contributions to TCRS for the years ended June 30, 2005, 2004, and 2003 were $4,699,570, $3,179,591, and $2,738,117, respectively, equal to the required contributions for each year.

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H. Post-employment Benefits

In addition to the retirement commitments described in Note V.G., Rutherford County and the discretely presented Rutherford County School Department provide post-retirement health care benefits, in accordance with contract provisions, to all employees who retire from the county on or after age 55 with at least 15 years of service and have been covered under the county group medical plan for a continuous five-year period immediately prior to retirement, who retire from the county on or after age 62 with at least ten years of service and have been covered under the county group medical plan for a continuous five-year period immediately prior to retirement, or who retire after 30 years of service and have been covered under the county group medical plan for a continuous five-year period immediately prior to retirement. Currently, 49 county and 205 school retirees meet those eligibility requirements. The county and the School Department pay 50 percent of medical premiums for retirees and their dependents. Expenditures for post-retirement health care benefits are recognized as retirees report claims and include a provision for estimated claims incurred but not reported to the county. During the year, expenditures totaling $69,680 (county) and $416,372 (School Department) were recognized for post-employment health care.

I. Office of Central Accounting and Budgeting

Office of Director of Finance

Rutherford County operates under Chapter 49, Private Acts of 1979, as amended. This act provides for a central system of accounting and budgeting covering all funds of the county. Accounting records of all funds are maintained under the supervision of the director of finance.

J. Purchasing Laws

Office of County Mayor Chapter 421, Private Acts of 1943, as amended, governs purchasing procedures for the general county government. This act provides for purchases to be made by the county mayor and for all purchases exceeding $5,000 (excluding emergency purchases) to be made based on competitive bids solicited through newspaper advertisement. Office of Highway Superintendent Chapter 55, Private Acts of 1951, as amended, and Section 54-7-113, Tennessee Code Annotated (Uniform Road Law), govern purchasing procedures for the Highway Department. These statutes require all purchases exceeding $10,000 to be made on the basis of publicly advertised competitive bids.

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Office of Director of Schools Purchasing procedures for the discretely presented Rutherford County School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, Tennessee Code Annotated, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. This statute also requires competitive bids to be solicited through newspaper advertisement on all purchases exceeding $5,000.

VI. OTHER NOTES – DISCRETELY PRESENTED COMMUNITY CARE OF RUTHERFORD COUNTY, INC.

A. Summary of Significant Accounting Policies

This summary of significant accounting policies of Community Care of Rutherford County, Inc., is presented to assist in understanding the nursing home’s financial statements. The financial statements and notes are representations of the nursing home’s management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles. Financial Reporting Entity - Component Unit – As specified and described by Standard 14 of the Governmental Accounting Standards Board (GASB), the nursing home is a component unit of the primary government of Rutherford County, Tennessee. The nursing home reports its financial information separately from Rutherford County; however, the county in its financial report also discretely presents the nursing home’s financial information. The nursing home is a separate nonprofit entity that has considerable legal, financial, and administrative autonomy. However, as the governing board is not elected but instead is entirely appointed by the Rutherford County Commission, the nursing home cannot be a primary government. Instead it qualifies as a component unit according to the directives of GASB. GASB 14 specifies that component units must be legally separate organizations that have financial accountability to a primary government. Financial accountability exists prima facie if a special-purpose government is not fiscally independent. GASB states that to be fiscally independent the government has to have the authority to do three activities. One of these activities is to issue bonded debt without approval by another government. Community Care of Rutherford County, Inc., may not issue debt without Rutherford County’s approval, and the county remains contingently liable for all debt obligations. Because the nursing home is both a legal entity and is financially accountable to the primary government of Rutherford County as the County Commission approves all members of the governing board and by the nature of its fiscal dependence on Rutherford County as described above, it is a component unit of Rutherford County, Tennessee.

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Basis of Presentation – The financial statements are prepared on the accrual basis of accounting, which recognizes revenues when assessed and earned and expenses when incurred. As a component unit of Rutherford County, Tennessee, the financial statements of Community Care of Rutherford County, Inc., are presented in the manner required by generally accepted governmental accounting principles for enterprise funds. The nursing home has applied all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. Enterprise funds account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the governing body is that the costs (expenses, including depreciation) of providing services on a continuing basis be financed or recovered primarily through user charges. Cash Flows - Cash and Cash Equivalents – Community Care of Rutherford County, Inc., presents its cash flow statement using the direct method. For purposes of cash flow presentation, the nursing home considers cash in operating bank accounts, cash on hand, and certificates of deposit that have original maturities of three months or less as cash and cash equivalents. At June 30, 2005, there were no certificates of deposit that qualified as cash equivalents. Patient Service Revenue and Accounts Receivable – Patient service revenue is reported at the estimated net realizable amounts from residents, third-party payers, and others for services rendered. Revenue under third-party payer agreements is subject to audit and retroactive adjustment. Provisions for estimated third-party payer settlements are provided in the period the related services are rendered. Differences between the estimated amounts accrued and interim and final settlements are reported in operations in the year of settlement. Patient accounts receivable are due within ten days after the issuance of the request for payment. Third-party payer receivables are usually collected within 60 days. Receivables past due more than 120 days are considered delinquent. Delinquent accounts are written off based on individual evaluation and specific circumstances. Some delinquent accounts deemed to be collected are placed with an attorney for collection. Management has elected to record bad debts using the direct write-off method. Generally accepted accounting principles require that the allowance method be used to reflect bad debts and a change to the allowance method has been made in the current year. However, the effect of the use of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed in prior periods. Property and Equipment – Property and equipment are stated at cost. For financial statement purposes, depreciation of property and equipment is provided using the straight-line method. The general range of useful lives estimated for equipment is five to 20 years. Maintenance and repairs are

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charged to operations when incurred. The nursing home eliminates the costs and related allowances from the accounts for properties sold or retired, and any resulting gains or losses are included in income. Compensated Absences – Nursing home employees accrue personal leave, or compensated absences, by prescribed formula based on length of service. Compensated absences related to the nursing home employees are recorded within the period earned. Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Inventories – Inventories are recorded at cost, determined on the first-in, first-out method. Income Taxes – The nursing home is exempt from income taxes as a nonprofit corporation described in Section 501(c)(3) of the Internal Revenue Code, and accordingly, the financial statements do not reflect a provision for income taxes. Operating Revenues and Expenses – The nursing home’s operating revenues and expenses consist of revenues earned and expenses incurred relating to the operation and maintenance of its system. All other revenues and expenses are reported as non-operating revenues and expenses.

B. Lease Commitment

Community Care of Rutherford County, Inc., has a lease agreement with Rutherford County for the rental of the building it occupies. Under the lease terms, the annual rental is equal to the group and life insurance premiums paid by the nursing home. The lease is for a term of five years, beginning July 1, 2001, and ending on June 30, 2006. It may be terminated by either party upon a 30-day written notice. For the year ended June 30, 2005, group health and life insurance in the amount of $677,097 was paid.

C. Pension Plan

Plan Description – Certain employees of Rutherford County are members of the Tennessee Consolidated Retirement System (TCRS), an agent multiple-employer public employee retirement system (PERS) that acts as a common investment and administrative agent for political subdivisions in the state. The retirement plan for Community Care of Rutherford County is included in the total retirement program for Rutherford County. Therefore, separate retirement information for the nursing home is not available. Details relative to the funding status and progress, actuarially determined contribution requirements and contribution made, and trend information regarding the retirement plan can be found in the Comprehensive Annual

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Financial Report for Rutherford County. The nursing home’s payroll for employees covered by the TCRS for the year ended June 30, 2005, was $3,422,809. Total contributions to the plan for the year ended June 30, 2005, amounted to $396,704. The TCRS is a defined benefit retirement plan covering teachers and general employees of the state, as well as employees of political subdivisions that have elected coverage. Membership in the system is mandatory for state employees, teachers, and employees of participating political subdivisions. The TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service, or at any age with 30 years of service. A reduced retirement benefit is available to vested members at age 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident injury occurring while the member is in performance of duty. Members joining the system on or after July 1, 1979, become vested after five years of service, and members joining prior to July 1, 1979, were vested after four years of service. Benefit provisions are established and amended by state statute. Rutherford County is noncontributory and pays the total cost of pension compensation with the exception of certain employees whose contributions are identified in the pension plan footnote of the Comprehensive Annual Financial Report for Rutherford County.

D. Post-employment Benefits

In addition to the benefits described above, the county provides post-retirement health care benefits to all employees who retire from the county on or after age 55 with at least 15 years of service and five years of previous health care benefits. As of June 30, 2005, three retirees met those eligibility requirements. Community Care of Rutherford County, Inc., matches 50 percent of the health care premium that pays secondary to Medicare for the retiree. During the year ended June 30, 2005, expenditures of $2,243 were recognized for post-retirement health care premiums.

E. Patient Funds Held in Trust

At June 30, 2005, the nursing home held $25,669 on behalf of the patients. The nursing home is required to maintain a cash account as a depository for patient funds. The fund is restricted in use and can be used only for providing spending money for patients, purchasing supplies for patients with cash in the fund, or paying amounts due to the nursing home for patient care, provided the amount does not include monies stipulated for patients’ use

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only. All funds are required to be placed in an insured, interest-bearing account.

F. Cash and Investments

Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Public fund accounts covered by the pool are considered to be insured for purposes of custodial credit risk disclosure.

For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the nursing home.

Investments Legal Provisions. The nursing home is authorized to make investments in bonds, notes, or treasury bills of the United States, Federal Loan Bank bonds, Federal Home Loan Bank notes and bonds, Federal National Mortgage Association notes and debentures, banks or cooperative debentures, or any of its other agencies, or obligations guaranteed as to principal and interest by the United States or any of its agencies with a maturity not greater than one year, or in the pooled investment fund established under Tennessee law. During the year ended June 30, 2005, the Board of Directors chose to limit the investment of funds to certificates of deposits at banks and banking institutions. Cash reserves for operations were held in bank checking and savings accounts. As a result, the nursing home had no investments at June 30, 2005.

G. Obligations Under Capital Leases

The nursing home has entered into capital leases for equipment, furniture, and fixtures. Obligations under capital leases have been recorded in the accompanying financial statements at the present value of future minimum lease payments, discounted at an interest rate of .015 percent. The capitalized cost and accumulated depreciation of these capital assets at June 30, 2005, was $12,113 and $7,649, respectively. Future minimum payments under capital leases are as follows as of June 30, 2005:

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2006 $ 2,2552007 3,247Total future payments $ 5,502Less amount representing interest 0Present value of future payments $ 5,502Less current portion (2,255)

Noncurrent portion $ 3,247

H. Concentration of Credit Risk

The nursing home grants credits without collateral to its patients, most of whom are insured under third-party payer agreements. The mix of receivables from patients and third-party payers is:

Medicaid 35.09 %Medicare 36.33Private 13.8Insurance 14.78

Approximately 90.63 percent of net patient revenue is derived from third-party payers.

I. Risk Management

Risks related to the operation of the nursing home are managed through the purchase of commercial insurance policies. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. Information related to insurance coverage is as follows: Bond Coverage – Travelers Property Casualty issued the nursing home’s fidelity bond policy with blanket coverage, including comprehensive dishonesty, with liability limits of $250,000. The policy period is from August 16, 2003, to August 16, 2006. The officer and director’s liability coverage is with Executive Risk, with liability limits of $1,000,000, and the policy period is from December 5, 2004, to December 5, 2005. Travelers Property Casualty issued the nursing home’s long-term care facility residence fund bond with liability limits of $75,000. The policy period is from December 21, 2004, to December 21, 2005. Workers’ Compensation Coverage – The nursing home’s workers’ compensation policy was issued by Bridgefield Casualty Company with liability limits of $1,000,000 per individual per accident. The policy period is from January 1, 2005, to January 1, 2006. Comprehensive Liability Coverage – The nursing home’s liability policy was issued by various casualty companies. The policy periods are from

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July 1, 2004, to July 1, 2005. The policies provide general and automobile liability coverage of $1,000,000 per person per injury with a maximum liability of $3,000,000 per occurrence. Property Coverage – The nursing home’s property insurance coverage was issued by American Casualty Company of Reading, Pennsylvania, with liability limits of $7,631,000 for the buildings and personal property; $1,155,000 for blanket business income; and $25,000 each for accounts receivable, valuable papers and records, and electronic data processing systems. In addition, for the electronic data processing systems, there are limits for outside coverage territory of $10,000, and a $500,000 limit on newly acquired hardware and software.

J. Capital Assets

Capital assets are summarized as follows: DepreciableAssets 7-1-04 Additions 6-30-05

Land Improvements $ 3,883 $ 0 $ 3,883Departmental Equipment 261,354 51,953 313,307Motor Vehicles 48,460 0 48,460Fitness Equipment 0 18,805 18,805Leasehold Improvements 72,953 60,736 133,689Total $ 386,650 $ 131,494 $ 518,144Less: Accumulated Depreciation (148,866) (45,374) (194,240)

Total Capital Assets $ 237,784 $ 86,120 $ 323,904

K. Health Care Regulations

The health care industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government health care program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by health care providers. Violations of these laws and regulations could result in expulsion from government health care programs together with the imposition of significant fines and penalties, as well as repayments for patient services previously billed. Management believes that the nursing home is in compliance with fraud and abuse statutes, as well as other applicable government laws and regulations. Compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time.

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M. Donation to Primary Government

On May 6, 2004, the nursing home’s board of directors approved a donation in the amount of $250,000 to Rutherford County, Tennessee. This donation was made during the current fiscal year ended June 30, 2005.

VII. OTHER NOTES – DISCRETELY PRESENTED RUTHERFORD COUNTY EMERGENCY COMMUNICATIONS DISTRICT

A. Summary of Significant Accounting Policies

General Information – On May 15, 1984, the Tennessee state legislature approved the Tennessee Emergency Communications District Law (Acts 1984, ch. 867), which enables a county, upon approval by voters, to create a district to provide local emergency telephone service. Subsequently, on May 6, 1986, the voters of Rutherford County approved the establishment of a district for their county, the Rutherford County Emergency Communications District. As provided by the act, the district operates as a governmental organization through the directives of a board of directors and provides enhanced emergency telephone service for its service area. The directors serve without compensation for terms of four years. By their authority, they have employed a full-time director to assist the board in discharging its management responsibilities. Financial Reporting Entity - Component Unit – As specified and described by Standard 14 of the Governmental Accounting Standards Board (GASB), the district is a component unit of the primary government of Rutherford County, Tennessee. The district reports its financial information separately from Rutherford County; however, the district’s financial information should also be discretely presented by the county in its financial report. The district is a separate governmental entity that has considerable legal, financial, and administrative autonomy. However, as the governing board is not elected, but instead is entirely appointed by the Rutherford County Commission, the district cannot be a primary government. Instead, it qualifies as a component unit according to the directives of GASB. GASB 14 specifies that component units must be legally separate organizations that have financial accountability to a primary government. Financial accountability exists prima facie if a special-purpose government is not fiscally independent. GASB states that to be fiscally independent, the government has to have the authority to do three activities. Two of these are to issue bonded debt without approval by another government and to levy taxes or set rates or charges without approval by another government. As provided by Section 7-86-114, Tennessee Code Annotated, before issuing negotiable bonds, the district must have approval of the legislative body of a

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county wherein a district is established. It also must have approval before making purchase contracts, lease agreements, and notes payable of over five years’ duration. In addition, the Rutherford County Commission has the ability to adjust the district’s service charges. Because the district is both a legal entity and is financially accountable to the primary government of Rutherford County, as the County Commission appoints all members of the governing board and by the nature of its fiscal dependence on Rutherford County as described above, it is a component unit of Rutherford County. At June 30, 2005, there were no related receivables or payables between Rutherford County and the district. The district did not engage in any activities that were subject to the approval of Rutherford County. Basis of Presentation and Accounting – As a governmental entity, the district abides by the accounting rules and regulations issued by the Governmental Accounting Standards Board (GASB), as well as the Financial Accounting Standards Board issued on or before November 30, 1989, unless those pronouncements conflict or contradict GASB pronouncements. After November 30, 1989, the district follows GASB guidance only and does not follow any FASB guidance issued after that date. Promulgations of that board require that the accrual method of accounting be used for governmental units that operate in a manner similar to a private business. The district does not have the authority to levy or collect taxes but is supported instead by the fees collected from telephone subscribers who benefit from the availability of its service. It recovers the cost of providing its services from its customers. Consequently, the district functions in a manner similar to a private business enterprise and uses the accrual method of accounting. Income is recognized as it is earned, and expenses are recognized as they are incurred whether or not cash is received or paid out at that time. The accounts of the district are organized on the basis of a proprietary fund type, specifically an enterprise fund. The activities of this fund are accounted for with a separate set of self-balancing accounts that comprise the district’s assets, liabilities, net assets, revenues, and expenses. Enterprise funds account for activities (i) that are financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity; or (ii) that are required by laws or regulations that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues; or (iii) that the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service). The accounting and financial reporting treatment applied to the district is determined by its measurement focus. The transactions of the district are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operations are included on the statements of net assets. Net assets (i.e., total

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assets net of total liabilities) are segregated into invested in capital assets, net of related debt; restricted for debt service; and unrestricted components. As of June 30, 2005, the district had no debt. Budgetary Law and Practice – The director of the district files an annual budget with the chief executive of Rutherford County in accordance with Tennessee Code Annotated, Title 7, Chapter 86, Part 1. In March of each year, the director presents to the board of directors a preliminary budget, which is then discussed and amended as necessary for board approval. The budget for operations is prepared on the cash receipts and disbursements basis by line-item accounts. Revenues are budgeted in the year receipt is expected, and disbursements are budgeted in the year that the disbursement is expected to occur. The board has determined to maintain an investment approximating 12 months of the operating budget or $600,000 in cash and certificates of deposit as a resource for future expenses. Prepaid Expenses – The cost of prepaid insurance and any other applicable costs that are prepaid are charged to operations over the period of coverage. For the year ended June 30, 2005, prepaid insurance and service contract costs were $17,014. Property and Equipment – Property and equipment are stated at cost or estimated historical cost if actual cost is not available and depreciated over the estimated useful lives of the related assets by the straight-line method of depreciation. The district defines capital assets as assets with an initial, individual cost of more that $1,000 and an estimated useful life in excess of one year. Maintenance and repairs are charged to operations when incurred. Major renewals and betterments are capitalized. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts, and any gain or loss is included as non-operating revenue or loss. The estimated useful lives are as follows: Buildings and improvements 40 yearsFurniture and fixtures 5-10 yearsCommunications equipment 2-10 yearsVehicle 5 yearsOther capital assets 5-10 years

Compensated Absences – The Board of Directors voted to adopt a policy for vacation, sick leave, and holidays effective January 1, 1995. Full-time, permanent employees are granted vacation benefits in varying amounts to specified maximums depending on tenure with the district. Excess days earned are transferred to sick leave days. Sick leave accrues to full-time, permanent employees at the rate of one day per month of service. An employee is entitled to accrue sick leave days without limitation on the

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number of days. If an employee should leave prior to the vesting of his retirement benefits, no compensation will be paid for unused sick days. After an employee is eligible to receive vested benefits in the retirement plan, any sick leave that said employee has accrued will be credited for retirement service days. Employees are entitled to overtime or compensatory time. The maximum amount of compensatory time that may be accrued by non-emergency personnel is 250 hours, and the maximum hours for emergency personnel is 450 hours. Hours exceeding the maximum convert to sick leave on January 1. The director cannot acquire overtime pay, but can build and use compensatory time. An estimated liability for vacation, sick leave, and compensatory benefits has been accrued under the vesting method. The estimated amount calculated for compensated absences was recorded as a liability at June 30, 2005, and is $6,214. Estimates – Management of the district has made certain estimates and assumptions relating to the reporting of assets and liabilities and revenues and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results may differ from those estimates. Cash Flow - Cash and Cash Equivalents – The district presents its cash flow statement using the direct method. For purposes of cash flow presentation, the district considers cash in operating bank accounts, cash on hand, and certificates of deposit that have original maturities of three months or less as cash and cash equivalents. At June 30, 2005, there were no certificates of deposit that qualified as cash equivalents. Operating Revenues and Expenses – The district’s operating revenues and expenses consist of revenues earned and expenses incurred relating to the operation and maintenance of its system. Nonoperating revenues and expenses consist of those revenues and expenses that are related to financing and investing type of activities and result from nonexchange transactions or ancillary activities.

B. Cash and Investments Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Public fund accounts covered by the pool are considered to be insured for purposes of custodial credit risk disclosure.

For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured

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amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the district.

Investments Legal Provisions. The district home is authorized to make investments in bonds, notes, or treasury bills of the United States, Federal Loan Bank bonds, Federal Home Loan Bank notes and bonds, Federal National Mortgage Association notes and debentures, banks or cooperative debentures, or any of its other agencies, or obligations guaranteed as to principal and interest by the United States or any of its agencies with a maturity not greater than one year, or in the pooled investment fund established under Tennessee law. During the year ended June 30, 2005, the Board of Directors chose to limit the investment of funds to certificates of deposits at banks and banking institutions. Cash reserves for operations were held in bank checking and savings accounts. As a result, the district home had no investments at June 30, 2005.

C. Accounts Receivable The district receives its revenue from the telephone subscribers residing within Rutherford County. As provided in the act, telephone companies collect the fees from the subscribers and remit the funds on a not-longer-than- bimonthly basis to the district. The policy of the telephone companies has been to remit based upon their billings rather than on their collections. Accordingly, the financial statements do not include a provision for bad debts. The following are receivables from the telephone companies at June 30, 2005: BellSouth Telecommunications, Inc. $ 47,351 Tennessee Telephone Co. 7,629 MCI WorldCom Communications 3,672 Others 10,160

Total $ 68,812

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D. Capital Assets

Capital assets are summarized as follows:

Depreciable Assets 7-1-04 Additions Deletions 6-30-05

Buildings and Improvements $ 1,098,077 $ 0 $ 0 $ 1,098,077Communications Equipment 959,366 3,749 (23,837) 939,278Furniture and Fixtures 46,199 0 0 46,199Office Equipment 71,177 5,649 0 76,826Vehicle 33,810 0 0 33,810Other Capital Assets 109,793 6,359 0 116,152Total $ 2,318,422 $ 15,757 $ (23,837) $ 2,310,342Less: Accumulated Depreciation (861,627) (87,679) 596 (948,710)Total $ 1,456,795 $ (71,922) $ (23,241) $ 1,361,632

Non-depreciable Assets

Land $ 17,500 $ 0 $ 0 $ 17,500Total $ 17,500 $ 0 $ 0 $ 17,500

Total Capital Assets $ 1,474,295 $ (71,922) $ (23,241) $ 1,379,132

E. Retirement Plan Plan Description – Employees of Rutherford County Emergency Communications District are members of the Political Subdivision Pension Plan (PSPP), an agent multiple-employer defined benefit pension plan administered by the Tennessee Consolidated Retirement System (TCRS). TCRS provides retirement benefits as well as death and disability benefits. Benefits are determined by a formula using the member’s high five-year average salary and years of service. Members become eligible to retire at the age of 60 with five years of service, or at any age with 30 years of service. A reduced retirement benefit is available to vested members at the age of 55. Disability benefits are available to active members with five years of service who become disabled and cannot engage in gainful employment. There is no service requirement for disability that is the result of an accident or injury occurring while the member was in the performance of duty. Members joining the system after July 1, 1979, became vested after five years of service, and members joining prior to July 1, 1979, were vested after four years of service. Benefit provisions are established in state statute found in Title 8, Chapters 34-37 of Tennessee Code Annotated. State statutes are amended by the Tennessee General Assembly. Political subdivisions such as

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Rutherford County Emergency Communications District participate in the TCRS as individual entities and are liable for all costs associated with the operation and administration of their plan. Benefit improvements are not applicable to a political subdivision unless approved by the chief governing body. The TCRS issues a publicly available financial report that includes financial statements and required supplementary information for the PSPP. That report may be obtained by writing to the Tennessee Treasury Department, Consolidated Retirement System, 10th Floor, Andrew Jackson Building, Nashville, TN 37243-0230 or can be accessed at www.treasury.state.tn.us. Funding Policy – Rutherford County Emergency Communications District has adopted a noncontributory retirement plan for its employees by assuming employee contributions up to five percent of annual covered payroll. Rutherford County Emergency Communications District is required to contribute at an actuarially determined rate; the rate for the fiscal year ended June 30, 2005, was 9.54 percent of annual covered payroll. The contribution requirement of plan members is set by state statute. The contribution requirement for Rutherford County Emergency Communications District is established and may be amended by the TCRS Board of Trustees. Annual Pension Cost – For the year ended June 30, 2005, Rutherford County Emergency Communications District’s annual pension cost of $11,411 to TCRS was equal to Rutherford County Emergency Communications District’s required and actual contributions. The required contribution was determined as part of the July 1, 2001, actuarial valuation using the frozen entry age actuarial cost method. Significant actuarial assumptions used in the valuation include (a) rate of return on investment of present and future assets of 7.5 percent a year compounded annually, (b) projected salary increases of 4.75 percent (graded) annual rate (no explicit assumption is made regarding the portion attributable to the effects of inflation on salaries), (c) projected 3.5 percent annual increase in the Social Security wage base, and (d) projected post-retirement increases of three percent annually. The actuarial value of assets was determined using techniques that smooth the effect of short-term volatility in the market value of total investments over a five-year period. Rutherford County Emergency Communications District’s unfunded actuarial accrued liability is amortized as a level dollar amount on a closed basis. The remaining amortization period at July 1, 2003, was 17 years. Trend information is as follows:

94

Fiscal Annual NetYear Pension Pension

Ended Cost (APC) Obligation

6-30-04 $ 8,626 100 % $ 06-30-03 8,490 100 06-30-02 9,492 100 0

Percentageof APC

Contributed

Required Supplementary Information – The following is the Schedule of Funding Progress for Rutherford County Emergency Communications District: (Dollar amounts in thousands)

ActuarialActuarial Accrued Unfunded UAAL as a

Actuarial Value of Liability AAL Funded Covered Percentage ofValuation Assets (AAL) (UAAL) Ratio Payroll Covered Payroll

Date (a) (b) (b) - (a) (a/b) (c) ({b-a}/c)

6-30-03 155$ $ 168 $ 13 92.26 % 111$ 11.71%6-30-01 123 137 14 89.78 102 13.73

6-30-1999 93 112 19 83.04 88 21.67

F. Risk Management The district is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The district purchases commercial insurance for claims and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.

G. Prior Period Adjustment During the year ended June 30, 2005, the district discovered that a disbursement to Middle Tennessee State University (MTSU) for communication equipment for the MTSU PSAP was included as an asset on the district’s asset listing and depreciated. The disbursement was actually a contribution to another government. As a result of the correction, communication equipment was decreased $23,837, accumulated depreciation decreased $596, and net assets decreased $23,241.

REQUIRED SUPPLEMENTARY INFORMATION

Exhibit G

Rutherford County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2005

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary Budgeted Amounts PositiveBasis) 7/1/2004 6/30/2005 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 31,488,126 $ 0 $ 0 $ 31,488,126 $ 30,379,644 $ 31,525,224 $ (37,098)Licenses and Permits 1,641,354 0 0 1,641,354 1,226,130 1,661,400 (20,046)Fines, Forfeitures and Penalties 1,874,502 0 0 1,874,502 1,325,650 1,878,202 (3,700)Charges for Current Services 4,089,402 0 0 4,089,402 3,884,980 4,144,256 (54,854)Other Local Revenues 1,618,561 0 0 1,618,561 712,770 1,634,801 (16,240)Fees Received from County Officials 6,326,697 0 0 6,326,697 5,410,500 6,246,000 80,697State of Tennessee 5,034,379 0 0 5,034,379 5,303,471 5,868,677 (834,298)Federal Government 1,653,191 0 0 1,653,191 1,882,566 1,690,645 (37,454)Other Governments and Citizens Groups 452,372 0 0 452,372 453,000 452,500 (128)

Total Revenues $ 54,178,584 $ 0 $ 0 $ 54,178,584 $ 50,578,711 $ 55,101,705 $ (923,121)

ExpendituresGeneral Government

County Commission $ 186,558 $ 0 $ 0 $ 186,558 $ 203,470 $ 203,470 $ 16,912Board of Equalization 97,765 0 0 97,765 316,890 316,890 219,125County Mayor 287,093 (708) 3,864 290,249 290,211 296,211 5,962Personnel Office 91,256 (705) 226 90,777 95,379 95,379 4,602County Attorney 218,796 0 0 218,796 220,406 220,406 1,610Election Commission 577,242 (7,481) 697 570,458 557,822 588,870 18,412Register of Deeds 102,459 (3,587) 1,224 100,096 114,970 114,970 14,874Planning 537,430 (1,096) 10,223 546,557 543,931 550,221 3,664Codes Compliance 43,525 0 0 43,525 43,823 43,823 298Geographical Information Systems 646,860 (492,356) 514,098 668,602 778,565 777,340 108,738County Buildings 848,926 (56,734) 166,212 958,404 905,852 1,015,082 56,678Other General Administration 187,497 (1,300) 2,950 189,147 192,788 192,788 3,641Preservation of Records 30,808 (3,963) 2,344 29,189 36,764 36,764 7,575Risk Management 202,387 (2,328) 670 200,729 195,013 205,688 4,959

(Continued)

Exhibit G


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Finance

Accounting and Budgeting $ 693,052 $ (7,819) $ 750 $ 685,983 $ 688,716 $ 701,851 $ 15,868Property Assessor's Office 1,783,928 (105,279) 80,644 1,759,293 1,473,592 1,920,668 161,375Reappraisal Program 394,436 (2,336) 200 392,300 396,832 400,237 7,937County Trustee's Office 39,904 (5,214) 1,204 35,894 47,475 47,475 11,581County Clerk's Office 160,425 (43,064) 13,068 130,429 164,650 164,650 34,221Data Processing 604,895 (21,904) 36,058 619,049 633,138 678,308 59,259

Administration of JusticeCircuit Court 294,411 (9,521) 8,244 293,134 341,614 341,614 48,480Circuit Court Judge 213,022 (15,672) 0 197,350 199,961 202,700 5,350General Sessions Court 754,672 0 380 755,052 775,420 777,195 22,143Drug Court 266,467 (420) 1,526 267,573 182,304 310,975 43,402Chancery Court 615,315 (2,421) 2,355 615,249 606,028 634,537 19,288Juvenile Court 191,683 (350) 0 191,333 177,231 198,198 6,865District Attorney General 48,881 0 0 48,881 39,584 51,692 2,811Other Administration of Justice 63,428 0 0 63,428 61,056 67,420 3,992Probation Services 879,677 (7,600) 400 872,477 1,015,679 1,020,989 148,512

Public SafetySheriff's Department 12,344,825 (182,646) 242,894 12,405,073 12,375,213 12,598,428 193,355Special Patrols 45,847 0 0 45,847 57,804 57,804 11,957Traffic Control 9,398 0 0 9,398 10,000 10,000 602Wheel Tax Officer 75,343 (650) 350 75,043 57,245 77,629 2,586Jail 8,269,948 (42,750) 78,370 8,305,568 7,761,679 8,476,840 171,272Workhouse 1,729,853 (44,058) 5,479 1,691,274 1,786,981 1,823,641 132,367Juvenile Services 770,761 (5,277) 1,907 767,391 791,856 791,856 24,465Rescue Squad 59,000 0 0 59,000 59,000 59,000 0Disaster Relief 1,177,334 (60,147) 300,771 1,417,958 1,237,525 1,719,736 301,778

(Continued)

Exhibit G





Expenditures (Cont.)Public Safety (Cont.)

Inspection and Regulation $ 622,665 $ (1,210) $ 2,697 $ 624,152 $ 632,276 $ 643,401 $ 19,249Public Health and Welfare

Local Health Center 514,373 (1,373) 1,308 514,308 569,105 569,105 54,797Rabies and Animal Control 698,684 (20,963) 20,213 697,934 831,786 825,676 127,742Ambulance/Emergency Medical Services 6,647,101 (61,117) 107,783 6,693,767 6,914,138 6,975,397 281,630Nursing Home 27,737 (18,991) 5,300 14,046 20,000 20,000 5,954Dental Health Program 10,736 0 3,030 13,766 14,000 14,000 234Other Local Health Services 1,084,169 (624) 11,200 1,094,745 1,265,126 1,340,700 245,955General Welfare Assistance 31,531 0 0 31,531 31,531 31,531 0Sanitation Management 14,382 0 0 14,382 15,700 15,700 1,318Other Public Health and Welfare 117,750 0 0 117,750 93,200 123,200 5,450

Social, Cultural and Recreational ServicesAdult Activities 24,570 0 0 24,570 24,570 24,570 0Senior Citizens Assistance 1,500 0 0 1,500 1,500 1,500 0Libraries 786,000 0 0 786,000 786,000 786,000 0Parks and Fair Boards 273,697 0 0 273,697 314,530 344,230 70,533

Agriculture & Natural ResourcesAgriculture Extension Service 437,264 (5,696) 0 431,568 462,181 467,711 36,143Soil Conservation 48,678 0 0 48,678 48,856 48,856 178

Other OperationsTourism 225,753 0 0 225,753 218,150 232,250 6,497Other Economic and Community Development 114,095 0 0 114,095 276,882 276,882 162,787Other Charges 178,483 (1,490) 2,611 179,604 222,840 223,940 44,336Employee Benefits 969,581 0 0 969,581 433,500 982,100 12,519Payments to Cities 1,622,124 0 0 1,622,124 1,625,000 1,625,000 2,876Miscellaneous 2,614,365 (38,634) 67,004 2,642,735 2,391,175 2,676,710 33,975

Total Expenditures $ 52,610,345 $ (1,277,484) $ 1,698,254 $ 53,031,115 $ 52,628,513 $ 56,039,804 $ 3,008,689

(Continued)

Exhibit G





Excess (Deficiency) of RevenuesOver Expenditures $ 1,568,239 $ 1,277,484 $ (1,698,254) $ 1,147,469 $ (2,049,802) $ (938,099) $ 2,085,568

Other Financing Sources (Uses)Transfers In $ 1,327,537 $ 0 $ 0 $ 1,327,537 $ 1,472,013 $ 1,422,375 $ (94,838)Transfers Out (1,462,624) 0 0 (1,462,624) 0 (1,462,624) 0

Total Other Financing Sources (Uses) $ (135,087) $ 0 $ 0 $ (135,087) $ 1,472,013 $ (40,249) $ (94,838)

Net Change in Fund Balance $ 1,433,152 $ 1,277,484 $ (1,698,254) $ 1,012,382 $ (577,789) $ (978,348) $ 1,990,730Fund Balance, July 1, 2004 18,481,252 (1,277,484) 0 17,203,768 16,200,216 16,200,216 1,003,552

Fund Balance, June 30, 2005 $ 19,914,404 $ 0 $ (1,698,254) $ 18,216,150 $ 15,622,427 $ 15,221,868 $ 2,994,282

RUTHERFORD COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

For the Year Ended June 30, 2005 BUDGETARY INFORMATION The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the County Commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year.

The budgetary level of control is at the major category level established by the State Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Board of Equalization, County Mayor, County Attorney, etc.). Management may make revisions within major categories, but only the governing body may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

The county's budgetary basis of accounting is consistent with generally accepted accounting principles (GAAP), except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and the GAAP basis is presented on the face of each budgetary statement.

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

Nonmajor Governmental Funds

Special Revenue Funds ________________________________________

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes.

________________________________________

Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for Rutherford County’s demolition landfill operations, convenience center operations, and postclosure care costs of the county’s closed landfill. Industrial/Economic Development Fund – The Industrial/Economic Development Fund is used to account for the operations of the Smyrna Airport properties. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Adequate Facilities/Development Tax Fund – The Adequate Facilities/Development Tax Fund is used to account for operations funded from the local development tax and investment income. District Attorney General Fund – The District Attorney General Fund is used to account for restricted revenue held for the benefit of the Office of District Attorney General. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register, and sheriff. Highway/Public Works Fund – The Highway/Public Works Fund is used to account for transactions of the county Highway Department. Public Works Fund – The Public Works Fund is used to account for transactions of the county Public Works Department.

Capital Projects Funds ________________________________________

Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities.

________________________________________ Community Development/Industrial Park Fund – The Community Development/ Industrial Park Fund is used to account for industrial park projects. Nursing Home Projects Fund – The Nursing Home Projects Fund is used to account for nursing home projects.

Exhibit H-1

Rutherford County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2005

Adequate Constitu -Solid Industrial / Facilities/ District tional

Waste / Economic Drug Development Attorney Officers -Sanitation Development Control Tax General Fees

ASSETS

Cash $ 777 $ 0 $ 774 $ 0 $ 0 $ 1,370,728Equity in Pooled Cash and Investments 4,148,603 264,069 897,141 5,799,688 108,596 0Accounts Receivable 103,032 0 0 27,750 0 1,230Due from Other Governments 251,332 0 0 0 582 0Property Taxes Receivable 1,149,828 0 0 0 0 0Allowance for Uncollectible Property Taxes (19,174) 0 0 0 0 0Notes Receivable - Long-Term 0 1,400,683 0 0 0 0Allowance for Doubtful Notes Receivable 0 (1,037,302) 0 0 0 0

Total Assets $ 5,634,398 $ 627,450 $ 897,915 $ 5,827,438 $ 109,178 $ 1,371,958


LiabilitiesAccounts Payable $ 1,089 $ 0 $ 0 $ 0 $ 13 $ 0Accrued Payroll 6,894 0 0 0 174 0Due to Other Funds 0 0 0 0 0 277,599Deferred Revenue - Current Property Taxes 1,107,528 0 0 0 0 0Deferred Revenue - Delinquent Property Taxes 19,519 0 0 0 0 0Other Deferred Revenues 87,464 0 0 0 0 0

Total Liabilities $ 1,222,494 $ 0 $ 0 $ 0 $ 187 $ 277,599

Fund BalancesReserved for Encumbrances $ 95,718 $ 0 $ 11,506 $ 14,883 $ 0 $ 0Reserved for Long-Term Notes Receivable 0 363,381 0 0 0 0Unreserved 4,316,186 264,069 886,409 5,812,555 108,991 1,094,359

Total Fund Balances $ 4,411,904 $ 627,450 $ 897,915 $ 5,827,438 $ 108,991 $ 1,094,359

Total Liabilities and Fund Balances $ 5,634,398 $ 627,450 $ 897,915 $ 5,827,438 $ 109,178 $ 1,371,958

(Continued)

Special Revenue Funds

Exhibit H-1

Rutherford County, TennesseeCombining Balance SheetNonmajor Governmental Funds (Cont.)

Community TotalHighway / Development/ Nursing Nonmajor

Public Public Industrial Home GovernmentalWorks Works Total Park Projects Total Funds

ASSETS

Cash $ 0 $ 1,918 $ 1,374,197 $ 0 $ 0 $ 0 $ 1,374,197Equity in Pooled Cash and Investments 4,420,241 612,069 16,250,407 28,850 10,952 39,802 16,290,209Accounts Receivable 4,607 0 136,619 0 0 0 136,619Due from Other Governments 1,161,725 0 1,413,639 0 0 0 1,413,639Property Taxes Receivable 574,914 0 1,724,742 0 0 0 1,724,742Allowance for Uncollectible Property Taxes (9,587) 0 (28,761) 0 0 0 (28,761)Notes Receivable - Long-Term 0 0 1,400,683 0 0 0 1,400,683Allowance for Doubtful Notes Receivable 0 0 (1,037,302) 0 0 0 (1,037,302)

Total Assets $ 6,151,900 $ 613,987 $ 21,234,224 $ 28,850 $ 10,952 $ 39,802 $ 21,274,026


LiabilitiesAccounts Payable $ 9,649 $ 433 $ 11,184 $ 0 $ 0 $ 0 $ 11,184Accrued Payroll 0 1,981 9,049 0 0 0 9,049Due to Other Funds 0 0 277,599 0 0 0 277,599Deferred Revenue - Current Property Taxes 553,764 0 1,661,292 0 0 0 1,661,292Deferred Revenue - Delinquent Property Taxes 9,743 0 29,262 0 0 0 29,262Other Deferred Revenues 365,200 0 452,664 0 0 0 452,664

Total Liabilities $ 938,356 $ 2,414 $ 2,441,050 $ 0 $ 0 $ 0 $ 2,441,050

Fund BalancesReserved for Encumbrances $ 0 $ 99 $ 122,206 $ 0 $ 0 $ 0 $ 122,206Reserved for Long-Term Notes Receivable 0 0 363,381 0 0 0 363,381Unreserved 5,213,544 611,474 18,307,587 28,850 10,952 39,802 18,347,389

Total Fund Balances $ 5,213,544 $ 611,573 $ 18,793,174 $ 28,850 $ 10,952 $ 39,802 $ 18,832,976

Total Liabilities and Fund Balances $ 6,151,900 $ 613,987 $ 21,234,224 $ 28,850 $ 10,952 $ 39,802 $ 21,274,026

Special Revenue Funds (Cont.) Capital Projects Funds

Exhibit H-2

Rutherford County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2005

Adequate Constitu - Solid Industrial / Facilities/ District tional

Waste / Economic Drug Development Attorney Officers - Sanitation Development Control Tax General Fees

RevenuesLocal Taxes $ 1,962,833 $ 0 $ 0 $ 7,701,375 $ 0 $ 0Licenses and Permits 0 0 0 0 0 0Fines, Forfeitures and Penalties 0 0 719,640 0 43,811 0Charges for Current Services 1,483,939 0 0 0 0 4,249,098Other Local Revenues 40,638 159,007 20,763 109,518 0 0State of Tennessee 237,613 0 0 0 0 0Federal Government 0 0 0 0 0 0

Total Revenues $ 3,725,023 $ 159,007 $ 740,403 $ 7,810,893 $ 43,811 $ 4,249,098


General Government $ 0 $ 0 $ 0 $ 77,776 $ 836 $ 635,890Finance 0 0 0 0 0 1,775,173Administration of Justice 0 0 0 0 51,203 1,400,844Public Safety 0 0 805,036 0 0 0Public Health and Welfare 2,444,417 0 0 0 0 0Agricultural and Natural Resources 0 0 0 0 0 0Other Operations 129,734 220,063 0 804,061 0 0Highways 0 0 0 0 0 0

Capital Projects 0 0 0 187,893 0 0Total Expenditures $ 2,574,151 $ 220,063 $ 805,036 $ 1,069,730 $ 52,039 $ 3,811,907

Excess (Deficiency) of RevenuesOver Expenditures $ 1,150,872 $ (61,056) $ (64,633) $ 6,741,163 $ (8,228) $ 437,191

Other Financing Sources (Uses)Transfers In $ 0 $ 0 $ 0 $ 333 $ 0 $ 0Transfers Out (22,000) 0 0 (5,343,778) 0 0

Total Other Financing Sources (Uses) $ (22,000) $ 0 $ 0 $ (5,343,445) $ 0 $ 0

Net Change in Fund Balances $ 1,128,872 $ (61,056) $ (64,633) $ 1,397,718 $ (8,228) $ 437,191Fund Balance, July 1, 2004 3,283,032 688,506 962,548 4,429,720 117,219 657,168

Fund Balance, June 30, 2005 $ 4,411,904 $ 627,450 $ 897,915 $ 5,827,438 $ 108,991 $ 1,094,359

(Continued)


Exhibit H-2

Rutherford County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Community Total Highway / Development/ Nursing Nonmajor

Public Public Industrial Home Governmental Works Works Total Park Projects Total Funds

RevenuesLocal Taxes $ 3,277,389 $ 544,973 $ 13,486,570 $ 0 $ 0 $ 0 $ 13,486,570Licenses and Permits 0 37,700 37,700 0 0 0 37,700Fines, Forfeitures and Penalties 0 0 763,451 0 0 0 763,451Charges for Current Services 0 0 5,733,037 0 0 0 5,733,037Other Local Revenues 109,760 0 439,686 0 0 0 439,686State of Tennessee 3,626,244 0 3,863,857 0 0 0 3,863,857Federal Government 0 151,312 151,312 0 0 0 151,312

Total Revenues $ 7,013,393 $ 733,985 $ 24,475,613 $ 0 $ 0 $ 0 $ 24,475,613


General Government $ 0 $ 0 $ 714,502 $ 0 $ 0 $ 0 $ 714,502Finance 0 0 1,775,173 0 0 0 1,775,173Administration of Justice 0 0 1,452,047 0 0 0 1,452,047Public Safety 0 0 805,036 0 0 0 805,036Public Health and Welfare 0 0 2,444,417 0 0 0 2,444,417Agricultural and Natural Resources 0 932,152 932,152 0 0 0 932,152Other Operations 0 0 1,153,858 0 0 0 1,153,858Highways 6,477,902 0 6,477,902 0 0 0 6,477,902

Capital Projects 0 0 187,893 0 36,998 36,998 224,891Total Expenditures $ 6,477,902 $ 932,152 $ 15,942,980 $ 0 $ 36,998 $ 36,998 $ 15,979,978

Excess (Deficiency) of RevenuesOver Expenditures $ 535,491 $ (198,167) $ 8,532,633 $ 0 $ (36,998) $ (36,998) $ 8,495,635

Other Financing Sources (Uses)Transfers In $ 16,320 $ 235,932 $ 252,585 $ 0 $ 0 $ 0 $ 252,585Transfers Out (60,000) (6,300) (5,432,078) 0 0 0 (5,432,078)

Total Other Financing Sources (Uses) $ (43,680) $ 229,632 $ (5,179,493) $ 0 $ 0 $ 0 $ (5,179,493)

Net Change in Fund Balances $ 491,811 $ 31,465 $ 3,353,140 $ 0 $ (36,998) $ (36,998) $ 3,316,142Fund Balance, July 1, 2004 4,721,733 580,108 15,440,034 28,850 47,950 76,800 15,516,834

Fund Balance, June 30, 2005 $ 5,213,544 $ 611,573 $ 18,793,174 $ 28,850 $ 10,952 $ 39,802 $ 18,832,976

Special Revenue Funds (Cont.) Capital Projects Funds

Exhibit H-3


in Fund Balance - Actual (Budgetary Basis) and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 1,962,833 $ 0 $ 0 $ 1,962,833 $ 1,605,104 $ 1,990,662 $ (27,829)Charges for Current Services 1,483,939 0 0 1,483,939 1,070,000 1,490,000 (6,061)Other Local Revenues 40,638 0 0 40,638 40,000 42,050 (1,412)State of Tennessee 237,613 0 0 237,613 308,146 261,926 (24,313)

Total Revenues $ 3,725,023 $ 0 $ 0 $ 3,725,023 $ 3,023,250 $ 3,784,638 $ (59,615)

ExpendituresPublic Health and Welfare

Sanitation Education/Information $ 82,606 $ (8,613) $ 4,239 $ 78,232 $ 108,757 $ 95,058 $ 16,826Convenience Centers 1,380,989 (10,107) 9,973 1,380,855 1,394,623 1,431,753 50,898Other Waste Collection 284,472 0 2,500 286,972 287,500 297,500 10,528Landfill Operation and Maintenance 601,454 (31,713) 57,006 626,747 792,518 794,063 167,316Postclosure Care Costs 94,896 (1,000) 22,000 115,896 142,500 141,000 25,104

Other OperationsEmployee Benefits 35,888 0 0 35,888 35,500 36,500 612Miscellaneous 93,846 0 0 93,846 68,500 99,500 5,654

Total Expenditures $ 2,574,151 $ (51,433) $ 95,718 $ 2,618,436 $ 2,829,898 $ 2,895,374 $ 276,938

Excess (Deficiency) of RevenuesOver Expenditures $ 1,150,872 $ 51,433 $ (95,718) $ 1,106,587 $ 193,352 $ 889,264 $ 217,323

Other Financing Sources (Uses)Transfers Out $ (22,000) $ 0 $ 0 $ (22,000) $ 0 $ (22,000) $ 0

Total Other Financing Sources (Uses) $ (22,000) $ 0 $ 0 $ (22,000) $ 0 $ (22,000) $ 0

(Continued)

Exhibit H-3


in Fund Balance - Actual (Budgetary Basis) and BudgetSolid Waste/Sanitation Fund (Cont.)



Net Change in Fund Balance $ 1,128,872 $ 51,433 $ (95,718) $ 1,084,587 $ 193,352 $ 867,264 $ 217,323Fund Balance, July 1, 2004 3,283,032 (51,433) 0 3,231,599 3,347,762 3,347,762 (116,163)

Fund Balance, June 30, 2005 $ 4,411,904 $ 0 $ (95,718) $ 4,316,186 $ 3,541,114 $ 4,215,026 $ 101,160

Exhibit H-4


in Fund Balance - Actual and BudgetIndustrial/Economic Development FundFor the Year Ended June 30, 2005

Variancewith FinalBudget -

Budgeted Amounts PositiveActual Original Final (Negative)

RevenuesOther Local Revenues $ 159,007 $ 125,370 $ 159,011 $ (4)

Total Revenues $ 159,007 $ 125,370 $ 159,011 $ (4)

ExpendituresOther Operations

Industrial Development $ 203,033 $ 203,040 $ 203,040 $ 7Payments to Cities 17,030 17,030 17,030 0

Total Expenditures $ 220,063 $ 220,070 $ 220,070 $ 7

Excess (Deficiency) of RevenuesOver Expenditures $ (61,056) $ (94,700) $ (61,059) $ 3

Net Change in Fund Balance $ (61,056) $ (94,700) $ (61,059) $ 3Fund Balance, July 1, 2004 688,506 269,872 269,872 418,634

Fund Balance, June 30, 2005 $ 627,450 $ 175,172 $ 208,813 $ 418,637

Exhibit H-5


in Fund Balance - Actual (Budgetary Basis) and BudgetDrug Control FundFor the Year Ended June 30, 2005



RevenuesFines, Forfeitures and Penalties $ 719,640 $ 0 $ 0 $ 719,640 $ 680,000 $ 665,000 $ 54,640Other Local Revenues 20,763 0 0 20,763 20,000 20,000 763

Total Revenues $ 740,403 $ 0 $ 0 $ 740,403 $ 700,000 $ 685,000 $ 55,403

ExpendituresPublic Safety

Drug Enforcement $ 805,036 $ (721) $ 11,506 $ 815,821 $ 927,494 $ 928,344 $ 112,523Total Expenditures $ 805,036 $ (721) $ 11,506 $ 815,821 $ 927,494 $ 928,344 $ 112,523

Excess (Deficiency) of RevenuesOver Expenditures $ (64,633) $ 721 $ (11,506) $ (75,418) $ (227,494) $ (243,344) $ 167,926

Net Change in Fund Balance $ (64,633) $ 721 $ (11,506) $ (75,418) $ (227,494) $ (243,344) $ 167,926Fund Balance, July 1, 2004 962,548 (721) 0 961,827 961,827 961,827 0

Fund Balance, June 30, 2005 $ 897,915 $ 0 $ (11,506) $ 886,409 $ 734,333 $ 718,483 $ 167,926

Exhibit H-6


in Fund Balance - Actual (Budgetary Basis) and BudgetAdequate Facilities/Development Tax FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 7,701,375 $ 0 $ 0 $ 7,701,375 $ 3,750,000 $ 8,000,000 $ (298,625)Other Local Revenues 109,518 0 0 109,518 29,600 103,000 6,518

Total Revenues $ 7,810,893 $ 0 $ 0 $ 7,810,893 $ 3,779,600 $ 8,103,000 $ (292,107)


Other General Administration $ 77,776 $ 0 $ 0 $ 77,776 $ 38,000 $ 81,100 $ 3,324Other Operations

Contributions to Other Agencies 804,061 0 0 804,061 0 804,061 0Capital Projects

General Administration Projects 87,893 (89,710) 14,883 13,066 0 15,000 1,934Social, Cultural and Recreation Projects 100,000 0 0 100,000 100,000 100,000 0

Total Expenditures $ 1,069,730 $ (89,710) $ 14,883 $ 994,903 $ 138,000 $ 1,000,161 $ 5,258

Excess (Deficiency) of RevenuesOver Expenditures $ 6,741,163 $ 89,710 $ (14,883) $ 6,815,990 $ 3,641,600 $ 7,102,839 $ (286,849)

Other Financing Sources (Uses)Transfers In $ 333 $ 0 $ 0 $ 333 $ 0 $ 333 $ 0Transfers Out (5,343,778) 0 0 (5,343,778) (4,617,000) (6,226,939) 883,161

Total Other Financing Sources (Uses) $ (5,343,445) $ 0 $ 0 $ (5,343,445) $ (4,617,000) $ (6,226,606) $ 883,161

Net Change in Fund Balance $ 1,397,718 $ 89,710 $ (14,883) $ 1,472,545 $ (975,400) $ 876,233 $ 596,312Fund Balance, July 1, 2004 4,429,720 (89,710) 0 4,340,010 2,546,086 2,546,086 1,793,924

Fund Balance, June 30, 2005 $ 5,827,438 $ 0 $ (14,883) $ 5,812,555 $ 1,570,686 $ 3,422,319 $ 2,390,236

Exhibit H-7


in Fund Balance - Actual and BudgetHighway/Public Works FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 3,277,389 $ 2,885,000 $ 3,351,130 $ (73,741)Other Local Revenues 109,760 83,000 112,701 (2,941)State of Tennessee 3,626,244 3,573,600 3,564,109 62,135

Total Revenues $ 7,013,393 $ 6,541,600 $ 7,027,940 $ (14,547)

ExpendituresHighways

Administration $ 288,005 $ 310,955 $ 310,955 $ 22,950Highway and Bridge Maintenance 3,892,719 4,251,803 4,251,803 359,084Operation and Maintenance of Equipment 770,773 861,544 891,544 120,771Quarry Operations 418,934 665,175 665,175 246,241Other Charges 330,441 266,800 372,300 41,859Employee Benefits 142,666 154,000 154,000 11,334Capital Outlay 634,364 899,860 866,860 232,496

Total Expenditures $ 6,477,902 $ 7,410,137 $ 7,512,637 $ 1,034,735

Excess (Deficiency) of RevenuesOver Expenditures $ 535,491 $ (868,537) $ (484,697) $ 1,020,188

Other Financing Sources (Uses)Transfers In $ 16,320 $ 0 $ 16,320 $ 0Transfers Out (60,000) 0 (60,000) 0

Total Other Financing Sources (Uses) $ (43,680) $ 0 $ (43,680) $ 0

Net Change in Fund Balance $ 491,811 $ (868,537) $ (528,377) $ 1,020,188Fund Balance, July 1, 2004 4,721,733 4,721,344 4,721,344 389

Fund Balance, June 30, 2005 $ 5,213,544 $ 3,852,807 $ 4,192,967 $ 1,020,577

Exhibit H-8


in Fund Balance - Actual (Budgetary Basis) and BudgetPublic Works FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 544,973 $ 0 $ 0 $ 544,973 $ 527,503 $ 547,682 $ (2,709)Licenses and Permits 37,700 0 0 37,700 0 25,000 12,700Federal Government 151,312 0 0 151,312 0 197,792 (46,480)

Total Revenues $ 733,985 $ 0 $ 0 $ 733,985 $ 527,503 $ 770,474 $ (36,489)

ExpendituresAgriculture & Natural Resources

Storm Water Management $ 932,152 $ (136,851) $ 99 $ 795,400 $ 546,027 $ 1,038,876 $ 243,476Total Expenditures $ 932,152 $ (136,851) $ 99 $ 795,400 $ 546,027 $ 1,038,876 $ 243,476

Excess (Deficiency) of RevenuesOver Expenditures $ (198,167) $ 136,851 $ (99) $ (61,415) $ (18,524) $ (268,402) $ 206,987

Other Financing Sources (Uses)Transfers In $ 235,932 $ 0 $ 0 $ 235,932 $ 0 $ 235,932 $ 0Transfers Out (6,300) 0 0 (6,300) 0 (6,300) 0

Total Other Financing Sources (Uses) $ 229,632 $ 0 $ 0 $ 229,632 $ 0 $ 229,632 $ 0

Net Change in Fund Balance $ 31,465 $ 136,851 $ (99) $ 168,217 $ (18,524) $ (38,770) $ 206,987Fund Balance, July 1, 2004 580,108 (136,851) 0 443,257 442,805 442,805 452

Fund Balance, June 30, 2005 $ 611,573 $ 0 $ (99) $ 611,474 $ 424,281 $ 404,035 $ 207,439

Major Governmental Fund

General Debt Service Fund ________________________________________

The General Debt Service Fund is used to account for the accumulation of resources for, and the payment of, debt principal, interest, and related costs.

________________________________________

Exhibit I


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 28,981,863 $ 28,284,610 $ 29,032,893 $ (51,030)Other Local Revenues 1,534,986 366,250 1,525,340 9,646

Total Revenues $ 30,516,849 $ 28,650,860 $ 30,558,233 $ (41,384)


Other General Administration $ 557,961 $ 833,000 $ 582,233 $ 24,272Principal

General Government 2,008,735 2,008,735 2,008,735 0Education 15,710,714 15,710,715 15,710,715 1

InterestGeneral Government 2,007,805 1,899,178 2,007,811 6Education 12,057,603 12,156,735 12,064,359 6,756

Other Debt ServiceGeneral Government 294,350 0 294,408 58Education 328,145 0 328,203 58

Total Expenditures $ 32,965,313 $ 32,608,363 $ 32,996,464 $ 31,151

Excess (Deficiency) of RevenuesOver Expenditures $ (2,448,464) $ (3,957,503) $ (2,438,231) $ (10,233)

Other Financing Sources (Uses)Refunding Debt Issued $ 60,165,000 $ 0 $ 60,165,000 $ 0Premiums on Debt Issued 4,740,330 0 4,740,331 (1)Transfers In 3,837,188 3,400,500 4,098,763 (261,575)Payments to Refunded Debt Escrow Agent (64,792,077) 0 (64,792,077) 0

Total Other Financing Sources (Uses) $ 3,950,441 $ 3,400,500 $ 4,212,017 $ (261,576)

Net Change in Fund Balance $ 1,501,977 $ (557,003) $ 1,773,786 $ (271,809)Fund Balance, July 1, 2004 28,764,889 28,783,523 28,783,523 (18,634)

Fund Balance, June 30, 2005 $ 30,266,866 $ 28,226,520 $ 30,557,309 $ (290,443)

Proprietary Funds ________________________________________

Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the county, or other governments, on a cost-reimbursed basis.

________________________________________ Self-Insurance Fund – The Self-Insurance Fund is used to account for transactions of the county’s self-insured liability insurance. Workers’ Compensation Fund – The Workers’ Compensation Fund is used to account for the county’s self-insured workers’ compensation program.

Employee Insurance - Health Fund – The Employee Insurance - Health Fund is used to account for the county’s self-insured health program.

Exhibit J-1

Rutherford County, TennesseeCombining Statement of Net AssetsProprietary FundsJune 30, 2005

EmployeeSelf - Insurance - Workers'

Insurance Health Compensation Total

ASSETS

Cash $ 29,250 $ 0 $ 43,774 $ 73,024Equity in Pooled Cash and Investments 371,353 8,579,131 1,283,320 10,233,804Accounts Receivable 0 253,697 0 253,697Due from Other Governments 0 3,640 0 3,640Prepaid Items 0 200,000 0 200,000Total Assets $ 400,603 $ 9,036,468 $ 1,327,094 $ 10,764,165

LIABILITIES

Accounts Payable $ 8,500 $ 0 $ 0 $ 8,500Claims and Judgements Payable 0 3,475,521 1,723,000 5,198,521Due to Other Funds 0 2,139 0 2,139Total Liabilities $ 8,500 $ 3,477,660 $ 1,723,000 $ 5,209,160

NET ASSETS

Unrestricted $ 392,103 $ 5,558,808 $ (395,906) $ 5,555,005

Total Net Assets $ 392,103 $ 5,558,808 $ (395,906) $ 5,555,005

Internal Service Funds

Exhibit J-2

Rutherford County, TennesseeCombining Statement of Revenues, Expenses, and Changes in Net AssetsProprietary FundsFor the Year Ended June 30, 2005



Operating Revenues Charges for Current Services: Self-Insurance Premiums/Contributions $ 587,486 $ 22,407,917 $ 1,551,500 $ 24,546,903 Other Local Revenues: Retirees' Insurance Payments 0 958,463 0 958,463 Cobra Insurance Payments 0 57,451 0 57,451 Insurance Recovery 0 1,401,778 0 1,401,778Total Operating Revenues $ 587,486 $ 24,825,609 $ 1,551,500 $ 26,964,595

Operating Expenses Employee Benefits: Handling Charges & Administrative Costs $ 28,926 $ 448,620 $ 67,000 $ 544,546 Bank Charges 0 570 0 570 Other Supplies and Materials 0 1,734 0 1,734 Building Improvements 0 20,357 0 20,357 Data Processing Equipment 0 6,676 0 6,676 Consultants 0 12,579 0 12,579 Contracts with Private Agencies 0 839,489 0 839,489 Legal Services 0 1,002 0 1,002 Drug and Medical Supplies 0 18,559 0 18,559 Premiums on Corporate Surety Bonds 0 0 1,116 1,116 Dues and Memberships 0 192,372 0 192,372 Other Contracted Services 0 81,765 0 81,765 Excess Risk Insurance 0 977,233 92,470 1,069,703 Medical Claims 0 21,787,587 0 21,787,587 Liability Claims 171,458 0 0 171,458 Worker's Compensation Insurance 0 0 13,613 13,613 Data Processing Supplies 0 972 0 972 Other Self-Insured Claims 0 0 1,818,791 1,818,791 Other Charges 0 47,150 0 47,150Total Operating Expenses $ 200,384 $ 24,436,665 $ 1,992,990 $ 26,630,039Operating Income (Loss) $ 387,102 $ 388,944 $ (441,490) $ 334,556

Nonoperating Revenues (Expenses) Miscellaneous Refunds $ 0 $ 116,587 $ 4,198 $ 120,785Total Nonoperating Revenues (Expenses) $ 0 $ 116,587 $ 4,198 $ 120,785

Income (Loss) Before Contributions and Transfers $ 387,102 $ 505,531 $ (437,292) $ 455,341Contributions 0 2,190,000 0 2,190,000Transfers In 0 690,000 0 690,000Transfers Out 0 (99,580) (99,580) (199,160)

Change in Net Assets $ 387,102 $ 3,285,951 $ (536,872) $ 3,136,181Net Assests, July 1, 2004 5,001 2,272,857 140,966 2,418,824

Nets Assets, June 30, 2005 $ 392,103 $ 5,558,808 $ (395,906) $ 5,555,005


Exhibit J-3

Rutherford County, TennesseeCombining Statement of Cash FlowsProprietary FundsFor the Year Ended June 30, 2005



CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users $ 587,486 $ 23,650,825 $ 1,551,593 $ 25,789,904 Payment to Suppliers (20,426) (2,849,186) (174,199) (3,043,811) Claims Paid (171,458) (21,787,587) (1,235,166) (23,194,211) Insurance Recovery 0 1,401,778 0 1,401,778 Other Receipts (Payments) 0 116,587 4,198 120,785Net Cash Provided By (Used In) Operating Activities $ 395,602 $ 532,417 $ 146,426 $ 1,074,445

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Contributions $ 0 $ 2,190,000 $ 0 $ 2,190,000 Transfers to Other Funds 0 (99,580) (99,580) (199,160) Transfers from Other Funds 0 690,000 0 690,000Net Cash Provided By (Used For) Noncapital Financing Activities $ 0 $ 2,780,420 $ (99,580) $ 2,680,840

Net Increase (Decrease) in Cash and Cash Equivalents $ 395,602 $ 3,312,837 $ 46,846 $ 3,755,285Cash and Cash Equivalents, July 1, 2004 5,001 5,266,294 1,280,248 6,551,543

Cash and Cash Equivalents, June 30, 2005 $ 400,603 $ 8,579,131 $ 1,327,094 $ 10,306,828

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating Income (Loss) $ 387,102 $ 388,944 $ (441,490) $ 334,556 Miscellaneous Refunds 0 116,587 4,198 120,785 Adjustments to Reconcile Net Operating Income (Loss) to Net Cash Provided by (Used In) Operating Activities: Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 0 226,296 93 226,389 (Increase) Decrease in Due From Other Governments 0 3,450 0 3,450 (Increase) Decrease in Prepaid Items 0 (200,000) 0 (200,000) Increase (Decrease) in Accounts Payable 8,500 (108) 0 8,392 Increase (Decrease) in Claims and Judgements Payable 0 0 587,902 587,902 Increase (Decrease) in Due To Other Funds 0 (2,138) (4,277) (6,415) Increase (Decrease) in Due To Component Units 0 (614) 0 (614)

Net Cash Provided By (Used In) Operating Activities $ 395,602 $ 532,417 $ 146,426 $ 1,074,445


Fiduciary Funds ________________________________________

Agency Funds are used to account for assets held by the county as an agent for individuals, private organizations, other governments, and/or other funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

________________________________________ Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. City School ADA - Murfreesboro Fund – The City School ADA - Murfreesboro Fund is used to account for the city school system’s share of education revenues collected by the county which must be apportioned between the various school systems on an average daily attendance basis. These collections are remitted to the city school system on a monthly basis. Joint Venture Fund – The Joint Venture Fund is used to account for transactions of the Central Tennessee Solid Waste Planning Board for Rutherford, Cannon, Warren, and Coffee Counties. Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk; circuit, general sessions, and juvenile courts clerk; clerk and master; register; and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others.

Exhibit K-1

Rutherford County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2005

City Constitu -Cities - School tionalSales ADA - Joint Officers -Tax Murfreesboro Venture Agency Total

ASSETS

Cash $ 0 $ 0 $ 0 $ 5,813,827 $ 5,813,827Equity in Pooled Cash and Investments 0 193,176 36,836 0 230,012Investments 0 0 0 224,902 224,902Accounts Receivable 0 0 0 16,278 16,278Due from Other Governments 5,357,408 0 0 0 5,357,408Taxes Receivable 0 8,696,098 0 0 8,696,098Allowance for Uncollectible Taxes 0 (145,925) 0 0 (145,925)

Total Assets $ 5,357,408 $ 8,743,349 $ 36,836 $ 6,055,007 $ 20,192,600

LIABILITIES

Due to Other Taxing Units $ 5,357,408 $ 8,743,349 $ 0 $ 0 $ 14,100,757Due to Joint Ventures 0 0 36,836 0 36,836Due to Litigants, Heirs, and Others 0 0 0 6,055,007 6,055,007

Total Liabilities $ 5,357,408 $ 8,743,349 $ 36,836 $ 6,055,007 $ 20,192,600

Agency Funds

Exhibit K-2

Rutherford County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2005

Beginning EndingBalance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 30,990,145 $ 30,990,145 $ 0 Due From Other Governments 4,918,258 5,357,408 4,918,258 5,357,408

Total Assets $ 4,918,258 $ 36,347,553 $ 35,908,403 $ 5,357,408

Liabilities Due to Other Taxing Units $ 4,918,258 $ 36,347,553 $ 35,908,403 $ 5,357,408

Total Liabilities $ 4,918,258 $ 36,347,553 $ 35,908,403 $ 5,357,408

City School ADA - Murfreesboro Fund Assets Equity in Pooled Cash and Investments $ 170,355 $ 14,342,201 $ 14,319,380 $ 193,176 Due From Other Governments 1,018,258 0 1,018,258 0 Taxes Receivable 8,463,770 8,696,098 8,463,770 8,696,098 Allowance for Uncollectible Taxes (371,128) (145,925) (371,128) (145,925)

Total Assets $ 9,281,255 $ 22,892,374 $ 23,430,280 $ 8,743,349

Liabilities Due to Other Taxing Units $ 9,281,255 $ 22,892,374 $ 23,430,280 $ 8,743,349


Joint Venture Assets Equity in Pooled Cash and Investments $ 46,728 $ 0 $ 9,892 $ 36,836

Total Assets $ 46,728 $ 0 $ 9,892 $ 36,836

Liabilities Accounts Payable $ 3,882 $ 0 $ 3,882 $ 0 Due to Joint Ventures 42,846 0 6,010 36,836

Total Liabilities $ 46,728 $ 0 $ 9,892 $ 36,836

Constitutional Officers - Agency Fund Assets Cash $ 5,491,912 $ 54,102,413 $ 53,780,498 $ 5,813,827 Investments 218,793 218,793 212,684 224,902 Accounts Receivable 548 16,278 548 16,278

Total Assets $ 5,711,253 $ 54,337,484 $ 53,993,730 $ 6,055,007

(Continued)

Exhibit K-2

Rutherford County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency Funds (Cont.)

Beginning EndingBalance Additions Deductions Balance

Constitutional Officers - Agency Fund (Cont.) Liabilities Due to Litigants, Heirs, and Others $ 5,711,253 $ 54,337,484 $ 53,993,730 $ 6,055,007


Totals - All Agency Funds Assets Cash $ 5,491,912 $ 54,102,413 $ 53,780,498 $ 5,813,827 Equity in Pooled Cash and Investments 217,083 45,332,346 45,319,417 230,012 Investments 218,793 218,793 212,684 224,902 Accounts Receivable 548 16,278 548 16,278 Due From Other Governments 5,936,516 5,357,408 5,936,516 5,357,408 Taxes Receivable 8,463,770 8,696,098 8,463,770 8,696,098 Allowance for Uncollectible Taxes (371,128) (145,925) (371,128) (145,925)

Total Assets $ 19,957,494 $ 113,577,411 $ 113,342,305 $ 20,192,600

Liabilities Accounts Payable $ 3,882 $ 0 $ 3,882 $ 0 Due to Other Taxing Units 14,199,513 59,239,927 59,338,683 14,100,757 Due to Joint Ventures 42,846 0 6,010 36,836 Due to Litigants, Heirs, and Others 5,711,253 54,337,484 53,993,730 6,055,007


Rutherford County School Department ________________________________________

This section presents fund financial statements for the Rutherford County School Department, a discretely presented component unit. The School Department uses a General Fund, one Special Revenue Fund, one Capital Projects Fund, and one Fiduciary Fund.

________________________________________ General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department.

School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues which must be expended on specific education programs.

Other Capital Projects Fund – The Other Capital Projects Fund is used to account for building construction and renovations of the School Department. Endowment Fund – The Endowment Fund is used to account for an endowment received by the School Department for which the principal amount must remain intact while interest earned on the principal is to fund a scholarship at Eagleville High School.

Exhibit L-1

Rutherford County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Rutherford County School DepartmentJune 30, 2005

TotalGeneral Other School Govern-Purpose Capital Federal mentalSchool Projects Projects Funds

ASSETS

Equity in Pooled Cash and Investments $ 21,608,300 $ 39,526,494 $ 405,676 $ 61,540,470Accounts Receivable 426,125 0 0 426,125Due from Other Governments 5,789,142 0 804,898 6,594,040Due from Other Funds 166,606 0 0 166,606Property Taxes Receivable 46,517,225 0 0 46,517,225Allowance for Uncollectible Property Taxes (780,584) 0 0 (780,584)Advances to Other Funds 1,080,000 0 0 1,080,000

Total Assets $ 74,806,814 $ 39,526,494 $ 1,210,574 $ 115,543,882


LiabilitiesAccounts Payable $ 1,315,468 $ 0 $ 53,704 $ 1,369,172Accrued Payroll 9,623,547 0 378,633 10,002,180Due to Other Funds 0 0 166,606 166,606Advances Payable to Other Funds 0 1,080,000 0 1,080,000Deferred Revenue - Current Property Taxes 44,788,409 0 0 44,788,409Deferred Revenue - Delinquent Property Taxes 802,157 0 0 802,157Other Deferred Revenues 2,644,232 0 0 2,644,232

Total Liabilities $ 59,173,813 $ 1,080,000 $ 598,943 $ 60,852,756

Fund BalancesReserved for Encumbrances $ 4,383,932 $ 5,047,714 $ 308,351 $ 9,739,997Reserved for Advances to Other Funds 1,080,000 0 0 1,080,000Reserved for Driver Education 217,719 0 0 217,719Reserved for Career Ladder - Extended Contract 9,069 0 0 9,069Reserved for Career Ladder Program 67,026 0 0 67,026Reserved for Title I Grants to Local Education Agencies 0 0 676 676Reserved for Innovative Education Program Strategies 0 0 426 426Reserved for Special Education - Grants to States 0 0 54,174 54,174Other Federal Reserves 0 0 248,004 248,004Unreserved, Reported In:

General Fund 9,875,255 0 0 9,875,255Capital Projects Funds 0 33,398,780 0 33,398,780

Total Fund Balances $ 15,633,001 $ 38,446,494 $ 611,631 $ 54,691,126

Total Liabilities and Fund Balances $ 74,806,814 $ 39,526,494 $ 1,210,574 $ 115,543,882

Major FundsNonmajor

Fund

Exhibit L-2

Rutherford County, TennesseeDiscretely Presented Rutherford County School DepartmentReconciliation of the Governmental Funds Balance Sheet to the Statement of Net AssetsJune 30, 2005

Amounts reported for governmental activities in the statement of net assets (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit L-1) $ 54,691,126

(1) Capital assets used in governmental activities are not financial resources andtherefore are not reported in the funds. 273,716,202

(2) Long-term liabilities are not due in the current period and therefore arenot reported in the funds. (737,912)

(3) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the funds. 3,446,389

Net assets of governmental activities (Exhibit A) $ 331,115,805

Exhibit L-3


and Changes in Fund Balances -Governmental Funds

Discretely Presented Rutherford County School DepartmentFor the Year Ended June 30, 2005

General Other School Total Purpose Capital Federal Governmental School Projects Projects Funds

RevenuesLocal Taxes $ 76,895,569 $ 0 $ 0 $ 76,895,569Licenses and Permits 14,433 0 0 14,433Charges for Current Services 223,365 0 0 223,365Other Local Revenues 1,158,076 0 0 1,158,076State of Tennessee 93,999,830 0 0 93,999,830Federal Government 4,542,127 0 9,703,596 14,245,723Other Governments and Citizens Groups 0 43,554,061 0 43,554,061

Total Revenues $ 176,833,400 $ 43,554,061 $ 9,703,596 $ 230,091,057


Instruction $ 114,658,355 $ 0 $ 6,529,780 $ 121,188,135Support Services 52,512,049 0 3,372,082 55,884,131Operation of Non-Instructional Services 4,338,572 0 3,870 4,342,442Capital Outlay 150,443 0 0 150,443

Capital Projects 0 25,681,423 0 25,681,423Total Expenditures $ 171,659,419 $ 25,681,423 $ 9,905,732 $ 207,246,574

Excess (Deficiency) of RevenuesOver Expenditures $ 5,173,981 $ 17,872,638 $ (202,136) $ 22,844,483

Other Financing Sources (Uses)Transfers In $ 501,181 $ 4,265,148 $ 0 $ 4,766,329Transfers Out (4,265,148) 0 (501,181) (4,766,329)

Total Other Financing Sources (Uses) $ (3,763,967) $ 4,265,148 $ (501,181) $ 0

Net Change in Fund Balances $ 1,410,014 $ 22,137,786 $ (703,317) $ 22,844,483Fund Balance, July 1, 2004 14,222,987 16,308,708 1,314,948 31,846,643

Fund Balance, June 30, 2005 $ 15,633,001 $ 38,446,494 $ 611,631 $ 54,691,126

Major FundsNonmajor

Fund

Exhibit L-4

Rutherford County, TennesseeDiscretely Presented Rutherford County School DepartmentReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2005

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit L-3) $ 22,844,483

(1) Governmental funds report capital outlays as expenditures. However, in the statementof activities the cost of those assets is allocated over their estimated useful livesand reported as depreciation expense. This is the amount by which capital outlaysexceeded depreciation in the current period. 16,537,288

(2) The net effect of various miscellaneous transactions involving capital assets(sales, trade-ins, and donations) is to decrease net assets. (4,766,796)

(3) Revenues in the statement of activities that do not provide current financial resourcesare not reported as revenues in the funds. (376,587)

(4) Some expenses reported in the statement of activities do not require the use ofcurrent financial resources and, therefore, are not reported as expenditures ingovernmental funds. (70,426)

Change in net assets of governmental activities (Exhibit B) $ 34,167,962

Exhibit L-5


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Rutherford County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2005



RevenuesLocal Taxes $ 76,895,569 $ 0 $ 0 $ 76,895,569 $ 74,147,177 $ 76,051,176 $ 844,393Licenses and Permits 14,433 0 0 14,433 10,000 13,000 1,433Charges for Current Services 223,365 0 0 223,365 218,000 170,000 53,365Other Local Revenues 1,158,076 0 0 1,158,076 257,000 1,104,061 54,015State of Tennessee 93,999,830 0 0 93,999,830 89,077,609 91,938,688 2,061,142Federal Government 4,542,127 0 0 4,542,127 4,146,125 4,652,837 (110,710)

Total Revenues $ 176,833,400 $ 0 $ 0 $ 176,833,400 $ 167,855,911 $ 173,929,762 $ 2,903,638

ExpendituresInstruction

Regular Instruction Program $ 90,627,613 $ (2,774,623) $ 3,127,575 $ 90,980,565 $ 90,223,724 $ 91,571,140 $ 590,575Alternative Instruction Program 1,260,272 (1,834) 4,020 1,262,458 1,278,932 1,298,653 36,195Special Education Program 14,259,407 (420,462) 99,036 13,937,981 13,710,513 14,097,073 159,092Vocational Education Program 6,008,925 (163,680) 131,633 5,976,878 5,908,134 6,108,928 132,050Adult Education Program 387,185 (42,673) 38,797 383,309 487,150 487,650 104,341Other 2,114,953 0 0 2,114,953 0 2,190,000 75,047

Support ServicesAttendance 446,630 (1,499) 1,767 446,898 440,837 454,170 7,272Health Services 1,300,224 (9,579) 6,235 1,296,880 1,318,983 1,332,870 35,990Other Student Support 4,470,418 (2,205) 7,934 4,476,147 4,436,699 4,602,124 125,977Regular Instruction Program 6,196,153 (139,086) 30,302 6,087,369 6,149,379 6,252,111 164,742Alternative Instruction Program 468,930 (201) 1,533 470,262 434,953 474,298 4,036Special Education Program 735,576 (38,054) 26,813 724,335 712,012 763,215 38,880Vocational Education Program 104,239 (1,898) 1,780 104,121 104,063 104,591 470Adult Programs 149,312 0 445 149,757 160,696 161,076 11,319Board of Education 3,031,105 (2,080) 6,037 3,035,062 2,657,783 3,110,907 75,845

(Continued)

Exhibit L-5


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Rutherford County School DepartmentGeneral Purpose School Fund (Cont.)



Expenditures (Cont.)Support Services (Cont.)

Director of Schools $ 501,057 $ (9,323) $ 9,931 $ 501,665 $ 514,094 $ 514,968 $ 13,303Office of the Principal 8,788,749 (2,367) 2,263 8,788,645 9,134,632 9,154,959 366,314Fiscal Services 550,247 (2,123) 2,796 550,920 568,872 563,874 12,954Operation of Plant 12,627,590 (151,829) 273,064 12,748,825 12,327,630 13,066,043 317,218Maintenance of Plant 3,789,721 (166,037) 123,449 3,747,133 3,761,411 3,761,558 14,425Transportation 7,693,811 (3,132) 18,893 7,709,572 7,807,367 7,808,602 99,030Central and Other 1,658,287 (86,890) 79,773 1,651,170 1,687,612 1,675,178 24,008

Operation of Non-Instructional ServicesFood Service 3,931,353 (552) 49,072 3,979,873 3,630,630 4,066,676 86,803Community Services 407,219 (1,500) 0 405,719 434,805 428,509 22,790

Capital OutlayRegular Capital Outlay 150,443 (839) 340,784 490,388 45,000 505,843 15,455

Total Expenditures $ 171,659,419 $ (4,022,466) $ 4,383,932 $ 172,020,885 $ 167,935,911 $ 174,555,016 $ 2,534,131

Excess (Deficiency) of RevenuesOver Expenditures $ 5,173,981 $ 4,022,466 $ (4,383,932) $ 4,812,515 $ (80,000) $ (625,254) $ 5,437,769

Other Financing Sources (Uses)Transfers In $ 501,181 $ 0 $ 0 $ 501,181 $ 80,000 $ 325,338 $ 175,843Transfers Out (4,265,148) 0 0 (4,265,148) 0 (4,265,148) 0

Total Other Financing Sources (Uses) $ (3,763,967) $ 0 $ 0 $ (3,763,967) $ 80,000 $ (3,939,810) $ 175,843

(Continued)

Exhibit L-5


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Rutherford County School DepartmentGeneral Purpose School Fund (Cont.)



Net Change in Fund Balance $ 1,410,014 $ 4,022,466 $ (4,383,932) $ 1,048,548 $ 0 $ (4,565,064) $ 5,613,612Fund Balance, July 1, 2004 14,222,987 (4,022,466) 0 10,200,521 10,296,168 10,296,168 (95,647)

Fund Balance, June 30, 2005 $ 15,633,001 $ 0 $ (4,383,932) $ 11,249,069 $ 10,296,168 $ 5,731,104 $ 5,517,965

Exhibit L-6


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Rutherford County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2005



RevenuesFederal Government $ 9,703,596 $ 0 $ 0 $ 9,703,596 $ 14,601,345 $ 14,601,345 $ (4,897,749)

Total Revenues $ 9,703,596 $ 0 $ 0 $ 9,703,596 $ 14,601,345 $ 14,601,345 $ (4,897,749)

ExpendituresInstruction

Regular Instruction Program $ 2,257,924 $ (34,327) $ 13,939 $ 2,237,536 $ 4,734,404 $ 4,734,404 $ 2,496,868Special Education Program 3,770,036 (467,886) 11,107 3,313,257 3,861,981 3,861,981 548,724Vocational Education Program 497,091 (55,044) 86,895 528,942 1,133,010 1,133,010 604,068Education Edge 4,729 (4,729) 0 0 0 0 0

Support ServicesHealth Services 52,157 0 0 52,157 90,192 90,192 38,035Other Student Support 750,958 (4,991) 1,869 747,836 955,831 955,831 207,995Regular Instruction Program 989,639 (290,167) 184,751 884,223 1,682,378 1,682,378 798,155Special Education Program 1,491,901 (87,295) 0 1,404,606 1,609,619 1,609,619 205,013Vocational Education Program 49,589 (2,640) 3,215 50,164 82,184 82,184 32,020Transportation 37,838 (5,200) 0 32,638 32,912 32,912 274

Operation of Non-Instructional ServicesFood Service 3,870 0 6,575 10,445 11,950 11,950 1,505

Total Expenditures $ 9,905,732 $ (952,279) $ 308,351 $ 9,261,804 $ 14,194,461 $ 14,194,461 $ 4,932,657

Excess (Deficiency) of RevenuesOver Expenditures $ (202,136) $ 952,279 $ (308,351) $ 441,792 $ 406,884 $ 406,884 $ 34,908

Other Financing Sources (Uses)Transfers Out $ (501,181) $ 0 $ 0 $ (501,181) $ (406,884) $ (501,182) $ 1

Total Other Financing Sources (Uses) $ (501,181) $ 0 $ 0 $ (501,181) $ (406,884) $ (501,182) $ 1

(Continued)

Exhibit L-6


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Rutherford County School DepartmentSchool Federal Projects Fund (Cont.)



Net Change in Fund Balance $ (703,317) $ 952,279 $ (308,351) $ (59,389) $ 0 $ (94,298) $ 34,909Fund Balance, July 1, 2004 1,314,948 (952,279) 0 362,669 362,669 362,669 0

Fund Balance, June 30, 2005 $ 611,631 $ 0 $ (308,351) $ 303,280 $ 362,669 $ 268,371 $ 34,909

Rutherford County, TennesseeStatement of Fiduciary Net AssetsFiduciary FundDiscretely Presented Rutherford County School DepartmentJune 30, 2005

Private -Purpose

Trust Fund

Endowment Fund

ASSETS

Equity in Pooled Cash and Investments $ 28,783Total Assets $ 28,783

NET ASSETS

Held in Trust for Scholarships $ 28,783

Exhibit L-7

Exhibit L-8

Rutherford County, TennesseeStatement of Changes in Fiduciary Net AssetsFiduciary FundDiscretely Presented Rutherford County School DepartmentFor the Year Ended June 30, 2005

Private -Purpose

TrustFund

EndowmentFund

ADDITIONS

Investment Income: Interest $ 346 Total Additions $ 346

DEDUCTIONS

Education: Scholarship $ 346 Total Deductions $ 346

Change in Net Assets $ 0 Net Assets, July 1, 2004 28,783

Net Assets, June 30, 2005 $ 28,783

MISCELLANEOUS SCHEDULES

Exhibit M-1

Rutherford County, TennesseeSchedule of Changes in Long-term Notes and BondsFor the Year Ended June 30, 2005

Paid and/orOriginal Date Last Issued Matured

Amount of Interest of Maturity Outstanding During During Debt OutstandingDescription of Indebtedness Issue Rate Issue Date 7-1-04 Period Period Refunded 6-30-05

NOTES PAYABLE Payable through General Debt Service Fund School EPA Asbestos Abatement $ 440,079 0 % Various 5-31-08 $ 67,983 $ 0 $ 24,449 $ 0 $ 43,534 Property and Equipment 9,510,000 4.3 12-30-1993 3-1-05 1,245,000 0 1,245,000 0 0 School Facilities 28,030,000 5.296149 5-1-1995 5-1-07 19,425,000 0 4,140,000 0 15,285,000 Land Purchase for Agriculture Facility 2,000,000 6 4-24-01 1-10-08 1,490,000 0 175,000 0 1,315,000

Total Notes Payable $ 22,227,983 $ 0 $ 5,584,449 $ 0 $ 16,643,534

GENERAL BONDED DEBT Payable through General Debt Service Fund Refunding Bonds - School 40,600,000 2.25 to 5.25 2-15-1993 4-1-08 $ 8,950,000 $ 0 $ 3,650,000 $ 0 $ 5,300,000 School Facilities 2,600,000 3.6 to 5 3-1-1994 5-1-06 565,000 0 275,000 0 290,000 Public Improvement - Jail 22,500,000 4.7 to 6.5 8-1-1996 4-1-06 1,645,000 0 800,000 0 845,000 School Facilities and Closure Costs 35,015,000 4.1 to 5.1 4-9-1998 4-1-08 27,730,000 0 1,455,000 21,520,000 4,755,000 School Facilities 9,900,000 5.2945 12-14-1999 6-30-09 9,500,000 0 400,000 6,200,000 2,900,000 School Facilities 34,000,000 5.5764981 3-8-00 6-30-20 10,200,000 0 600,000 0 9,600,000 Refunding Bonds 73,585,000 4 to 5 3-22-01 4-1-20 71,205,000 0 1,155,000 0 70,050,000 School Facilities 30,850,000 4 to 5 3-22-01 4-1-11 27,705,000 0 1,300,000 17,885,000 8,520,000 School Facilities and Public Improvement 30,610,000 4 to 5 10-24-01 4-1-11 27,350,000 0 1,500,000 15,250,000 10,600,000 School Facilities and Public Improvement 23,610,000 4 to 5 6-1-02 5-1-22 21,610,000 0 1,000,000 0 20,610,000 Various Purpose and Refunding (24.29%) 30,115,000 4.1446 4-1-03 4-1-23 30,115,000 0 0 0 30,115,000 School Facilities and Public Improvement 24,995,000 2.75 to 4.5 12-10-03 6-1-23 24,995,000 0 0 0 24,995,000 Refunding Bonds 42,400,000 3 to 5 11-1-04 4-1-21 0 42,400,000 0 0 42,400,000 School Facilities and Public Improvement 53,500,000 2.5 to 5 12-1-04 4-1-30 0 53,500,000 0 0 53,500,000 Refunding Bonds - School 17,765,000 3.5 to 5 2-1-05 4-1-21 0 17,765,000 0 0 17,765,000 Total General Bonded Debt $ 261,570,000 $ 113,665,000 $ 12,135,000 $ 60,855,000 $ 302,245,000

Exhibit M-2

Rutherford County, TennesseeSchedule of Principal and Interest Requirements by YearBonded Debt and Notes

TotalYear Percent Debt

Ending Principal Requirements Principal ServiceJune 30 Bonds Notes Total Retired Bonds Notes Total Requirements

2006 $ 14,140,000 $ 5,864,449 $ 20,004,449 $ 13,696,086 $ 1,072,425 $ 14,768,511 $ 34,772,9602007 12,660,000 9,854,085 22,514,085 13,062,036 693,776 13,755,812 36,269,8972008 21,490,000 925,000 22,415,000 12,515,629 55,500 12,571,129 34,986,1292009 19,060,000 0 19,060,000 11,584,079 0 11,584,079 30,644,0792010 16,730,000 0 16,730,000 32% 10,823,979 0 10,823,979 27,553,9792011 16,850,000 0 16,850,000 10,146,229 0 10,146,229 26,996,2292012 18,730,000 0 18,730,000 9,390,579 0 9,390,579 28,120,5792013 19,420,000 0 19,420,000 8,516,254 0 8,516,254 27,936,2542014 19,360,000 0 19,360,000 7,582,753 0 7,582,753 26,942,7532015 20,080,000 0 20,080,000 61% 6,648,503 0 6,648,503 26,728,5032016 17,405,000 0 17,405,000 5,696,723 0 5,696,723 23,101,7232017 15,180,000 0 15,180,000 4,872,748 0 4,872,748 20,052,7482018 16,050,000 0 16,050,000 4,179,725 0 4,179,725 20,229,7252019 13,885,000 0 13,885,000 3,420,500 0 3,420,500 17,305,5002020 12,605,000 0 12,605,000 85% 2,787,863 0 2,787,863 15,392,8632021 12,065,000 0 12,065,000 2,211,087 0 2,211,087 14,276,0872022 8,435,000 0 8,435,000 1,670,213 0 1,670,213 10,105,2132023 7,150,000 0 7,150,000 1,271,087 0 1,271,087 8,421,0872024 2,600,000 0 2,600,000 935,813 0 935,813 3,535,8132025 2,700,000 0 2,700,000 95% 818,812 0 818,812 3,518,8122026 2,850,000 0 2,850,000 700,688 0 700,688 3,550,6882027 3,000,000 0 3,000,000 576,000 0 576,000 3,576,0002028 3,100,000 0 3,100,000 441,000 0 441,000 3,541,0002029 3,250,000 0 3,250,000 301,500 0 301,500 3,551,5002030 3,450,000 0 3,450,000 100% 155,250 0 155,250 3,605,250

Total $ 302,245,000 $ 16,643,534 $ 318,888,534 $ 134,005,136 $ 1,821,701 $ 135,826,837 $ 454,715,371

Interest Requirements

Exhibit M-3

Rutherford County, TennesseeSchedule of Investments - All FundsJune 30, 2005

Date of Date of InterestFund and Type Purchase Maturity Rates Amount

General Capital Projects Fund State Treasurer's Investment Pool various none varies $ 169,062

Constitutional Officers - Agency Fund Clerk and Master State Treasurer's Investment Pool various none varies 224,902

Total Investments $ 393,964

Rutherford County, TennesseeSchedule of Notes Receivable - All FundsJune 30, 2005

Original Date Date Amount of of Interest

Description Debtor of Note Issue Maturity Rates Balance

Primary Government

Industrial/Economic Development Fund: Former Rental Property Wherry Housing $ 1,279,297 1-10-1994 3-9-19 0 % $ 1,037,302 Construction/Renovations Smyrna/Rutherford County Airport 639,724 9-17-1999 11-17-10 6 363,381

Total $ 1,400,683

School Department

Advance (Long-term loan): General Purpose School Fund Other Capital Projects Fund 2,200,000 5-21-04 6-30-07 0 $ 1,080,000

Total $ 1,080,000

Exhibit M-4

Exhibit M-5

Rutherford County, TennesseeSchedule of Transfers - All Funds and Discretely Presented Component UnitFor the Year Ended June 30, 2005

To Fund From Fund Purpose Amount

General Adequate Facilities/Development Tax Provide funds for equipment and vehicle purchases $ 1,128,377General Employee Insurance - Health Provide funds for salaries 99,580General Worker's Compensation Provide funds for salaries 99,580Adequate Facilities/Development Tax General Capital Projects Close construction project 333Highway/Public Works General Capital Projects Close construction project 16,320Public Works General Provide funds for equipment purchases 180,924Public Works Adequate Facilities/Development Tax Provide funds for various equipment purchases 55,008General Debt Service Adequate Facilities/Development Tax Transfer development tax 3,837,188General Capital Projects General Provide funds for building construction 680,000General Capital Projects Adequate Facilities/Development Tax Provide funds for various equipment purchases 323,205Employee Insurance - Health General Provide additional funding 601,700Employee Insurance - Health Solid Waste/Sanitation Provide additional funding 22,000Employee Insurance - Health Highway/Public Works Provide additional funding 60,000Employee Insurance - Health Public Works Provide additional funding 6,300General Purpose School (School Dept.) School Federal Projects (School Dept.) Indirect costs 501,181Other Capital Projects (School Dept.) General Purpose School (School Dept.) Provide funds for school construction projects 4,265,148

Total Transfers ` $ 11,876,844

Exhibit M-6

Rutherford County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsFor the Year Ended June 30, 2005

SalaryPaidDuring

Official Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 83,123 $ 60,000 Ohio Casualty Insurance CompanyHighway Superintendent Section 8-24-102, TCA 79,165 100,000 "Director of Schools State Board of Education and

Local Board of Education 116,000 (1) 50,000 "Trustee Section 8-24-102, TCA 71,969 3,276,400 "Assessor of Property: Tommy Sanford (7-1-04 through 8-31-04) Section 8-24-102, TCA 11,995 10,000 " John Barbee (9-1-04 through 6-30-05) Section 8-24-102, TCA 59,974 10,000 "Director of Finance County Commission 70,900 (2) 100,000 "County Clerk Section 8-24-102, TCA 71,969 50,000 "Circuit Court Clerk Section 8-24-102, TCA 71,969 50,000 "Clerk and Master Section 8-24-102, TCA, Chancery

Court Judge and County Commission 91,876 (3) 50,000 "Register Section 8-24-102, TCA 71,969 25,000 "Sheriff Section 8-24-102, TCA 79,684 (4) 25,000 "

Other Bonds County Engineer 2,000 " Coroner 2,500 " Employee Blanket Bond 100,000 The Hartford Insurance Company

(1) Includes $1,000 career ladder payment. Does not include $400 per month vehicle allowance.(2) Includes longevity pay of $200.(3) Includes special commissioner fees totaling $19,632 and longevity pay of $275.(4) Includes law enforcement training supplement in the amount of $519.

Exhibit M-7

Rutherford County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2005

Adequate Solid Industrial / Facilities/ District

Waste / Economic Drug Development Attorney General Sanitation Development Control Tax General

Local TaxesCounty Property Taxes

Current Property Tax $ 20,161,163 $ 1,015,174 $ 0 $ 0 $ 0 $ 0Trustee's Collections - Prior Year 490,223 23,520 0 0 0 0Circuit/Clerk & Master Collections - Prior Years 267,277 12,813 0 0 0 0Interest and Penalty 97,302 4,734 0 0 0 0Pick-up Taxes 93,840 4,684 0 0 0 0Payments in Lieu of Taxes - T.V.A. 3,217 162 0 0 0 0Payments in Lieu of Taxes - Other 5,039,569 0 0 0 0 0

County Local Option TaxesLocal Option Sales Tax 392,383 878,836 0 0 0 0Hotel/Motel Tax 645,012 0 0 0 0 0Wheel Tax 2,448,296 0 0 0 0 0Litigation Tax - General 117,533 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 234,483 0 0 0 0 0Business Tax 454,999 22,910 0 0 0 0Mineral Severance Tax 0 0 0 0 0 0Adequate Facilities/Development Tax 0 0 0 0 7,701,375 0

Statutory Local TaxesBank Excise Tax 406,255 0 0 0 0 0Wholesale Beer Tax 627,402 0 0 0 0 0Interstate Telecommunications Tax 9,172 0 0 0 0 0

Total Local Taxes $ 31,488,126 $ 1,962,833 $ 0 $ 0 $ 7,701,375 $ 0

Licenses and PermitsLicenses

Animal Registration $ 79,962 $ 0 $ 0 $ 0 $ 0 $ 0Animal Vaccination 19,813 0 0 0 0 0Cable TV Franchise 497,595 0 0 0 0 0

PermitsBuilding Permits 841,124 0 0 0 0 0Plumbing Permits 112,010 0 0 0 0 0Food Handling Permits 4,800 0 0 0 0 0Other Permits 86,050 0 0 0 0 0

Total Licenses and Permits $ 1,641,354 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


Exhibit M-7


All Governmental Fund Types (Cont.)



Fines, Forfeitures and PenaltiesCircuit Court

Fines $ 94,710 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 416,114 0 0 0 0 0Drug Control Fines 0 0 0 108,399 0 0Drug Court Fees 3,247 0 0 0 0 0Jail Fees 369,822 0 0 0 0 0District Attorney General Fees 0 0 0 0 0 37,802Data Entry Fee - Circuit Court 2,858 0 0 0 0 0

Criminal CourtDUI Treatment Fines 12,982 0 0 0 0 0Data Entry Fee - Criminal Court 2,500 0 0 0 0 0

General Sessions CourtFines 423,359 0 0 0 0 0Game and Fish Fines 1,008 0 0 0 0 0Drug Control Fines 0 0 0 170,182 0 0Drug Court Fees 42,711 0 0 0 0 0DUI Treatment Fines 59,285 0 0 0 0 0Data Entry Fee - General Sessions Court 40,395 0 0 0 0 0

Juvenile CourtFines 7,157 0 0 0 0 0Drug Court Fees 4,618 0 0 0 0 0Jail Fees 237,273 0 0 0 0 0Data Entry Fee - Juvenile Court 3,756 0 0 0 0 0

Chancery CourtData Entry Fee - Chancery Court 4,997 0 0 0 0 0

Other Courts - In-countyFines 144,052 0 0 0 0 0Drug Court Fees 2,590 0 0 0 0 0District Attorney General Fees 0 0 0 0 0 3,958

Courts in Other District CountiesDistrict Attorney General Fees 0 0 0 0 0 2,051

Judicial District Drug ProgramData Entry Fee - Other Courts 1,068 0 0 0 0 0

(Continued)


Exhibit M-7





Fines, Forfeitures and Penalties (Cont.)Other Fines, Forfeitures, and Penalties

Proceeds from Confiscated Property $ 0 $ 0 $ 0 $ 441,059 $ 0 $ 0Total Fines, Forfeitures and Penalties $ 1,874,502 $ 0 $ 0 $ 719,640 $ 0 $ 43,811

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 108,795 $ 0 $ 0 $ 0 $ 0Surcharge - Host Agency 0 1,375,144 0 0 0 0Patient Charges 3,387,119 0 0 0 0 0Past Due Collections - Ambulance 89,037 0 0 0 0 0Zoning Studies 39,675 0 0 0 0 0Other General Service Charges 550 0 0 0 0 0

FeesSubdivision Lot Fees 117,706 0 0 0 0 0Recreation Fees 8,289 0 0 0 0 0Telephone Commissions 185,191 0 0 0 0 0Constitutional Officers' Fees and Commissions 0 0 0 0 0 0Data Processing Fee - Register 134,310 0 0 0 0 0Probation Fees 10,088 0 0 0 0 0Data Processing Fee - Sheriff 21,451 0 0 0 0 0Sexual Offender Registration Fee 1,680 0 0 0 0 0

Education ChargesContract for Administrative Services with Other LEA's 90,206 0 0 0 0 0

Other Charges for ServicesOther Charges for Services 4,100 0 0 0 0 0

Total Charges for Current Services $ 4,089,402 $ 1,483,939 $ 0 $ 0 $ 0 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 1,012,888 $ 0 $ 125,366 $ 20,763 $ 109,518 $ 0Lease/Rentals 118,990 0 0 0 0 0Sale of Materials and Supplies 12,001 0 0 0 0 0Commissary Sales 154,763 0 0 0 0 0

(Continued)


Exhibit M-7





Other Local Revenues (Cont.)Recurring Items (Cont.)

Sale of Maps $ 6,437 $ 0 $ 0 $ 0 $ 0 $ 0Sale of Recycled Materials 31 38,589 0 0 0 0Sale of Animals/Livestock 85,380 0 0 0 0 0Miscellaneous Refunds 28,759 2,049 0 0 0 0

Nonrecurring ItemsAccrued Interest on Debt Issues 0 0 0 0 0 0Insurance Recovery 125,824 0 0 0 0 0Sale of Property 501 0 33,641 0 0 0Contributions & Gifts 14,973 0 0 0 0 0Performance Bond Forfeitures 39,985 0 0 0 0 0

Other Local RevenuesOther Local Revenues 18,029 0 0 0 0 0

Total Other Local Revenues $ 1,618,561 $ 40,638 $ 159,007 $ 20,763 $ 109,518 $ 0

Fees Received from County OfficialsExcess Fees

County Clerk $ 603,000 $ 0 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 767,773 0 0 0 0 0Register 1,546,207 0 0 0 0 0Trustee 2,933,921 0 0 0 0 0

Fees In Lieu of SalaryClerk and Master 427,142 0 0 0 0 0Sheriff 48,654 0 0 0 0 0

Total Fees Received from County Officials $ 6,326,697 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 9,000 $ 0 $ 0 $ 0 $ 0 $ 0State Reappraisal Grant 49,020 0 0 0 0 0Solid Waste Grants 0 25,724 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 77,286 0 0 0 0 0

(Continued)


Exhibit M-7





State of Tennessee (Cont.)Health and Welfare Grants

Health Department Programs $ 951,294 $ 0 $ 0 $ 0 $ 0 $ 0Public Works Grants

State Aid Program 0 0 0 0 0 0Litter Program 0 89,969 0 0 0 0

Other State RevenuesFlood Control 0 0 0 0 0 0Income Tax 128,090 0 0 0 0 0Beer Tax 16,778 0 0 0 0 0Alcoholic Beverage Tax 152,891 0 0 0 0 0Mixed Drink Tax 5,057 0 0 0 0 0Contracted Prisoner Boarding 2,983,368 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 0 0Petroleum Special Tax 0 0 0 0 0 0Registrar's Salary Supplement 16,380 0 0 0 0 0Other State Grants 115,909 0 0 0 0 0Other State Revenues 529,306 121,920 0 0 0 0

Total State of Tennessee $ 5,034,379 $ 237,613 $ 0 $ 0 $ 0 $ 0

Federal GovernmentFederal Through State

USDA School Lunch Program $ 24,331 $ 0 $ 0 $ 0 $ 0 $ 0Breakfast 13,273 0 0 0 0 0Community Development 111,310 0 0 0 0 0Homeland Security Grants 678,037 0 0 0 0 0Law Enforcement Grants 18,406 0 0 0 0 0Other Federal through State 45,491 0 0 0 0 0

Direct Federal RevenuePolice Service (Lake Area) 40,332 0 0 0 0 0Asset Forfeiture Funds 13,500 0 0 0 0 0Public Safety Partnership and Community Policing - COPS 608,511 0 0 0 0 0Other Direct Federal Revenue 100,000 0 0 0 0 0

Total Federal Government $ 1,653,191 $ 0 $ 0 $ 0 $ 0 $ 0

(Continued)


Exhibit M-7





Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 28,092 $ 0 $ 0 $ 0 $ 0 $ 0Contributions 250,000 0 0 0 0 0Contracted Services 172,611 0 0 0 0 0

OtherOther 1,669 0 0 0 0 0

Total Other Governments and Citizens Groups $ 452,372 $ 0 $ 0 $ 0 $ 0 $ 0

Total $ 54,178,584 $ 3,725,023 $ 159,007 $ 740,403 $ 7,810,893 $ 43,811

(Continued)


Exhibit M-7



Constitu - tional Highway / General General

Officers - Public Public Debt Capital Fees Works Works Service Projects Total


Current Property Tax $ 0 $ 1,820 $ 510,510 $ 24,392,636 $ 0 $ 46,081,303Trustee's Collections - Prior Year 0 0 11,807 525,923 0 1,051,473Circuit/Clerk & Master Collections - Prior Years 0 0 6,467 286,556 0 573,113Interest and Penalty 0 128 2,258 108,155 0 212,577Pick-up Taxes 0 0 2,287 110,229 0 211,040Payments in Lieu of Taxes - T.V.A. 0 0 82 3,893 0 7,354Payments in Lieu of Taxes - Other 0 0 0 0 0 5,039,569

County Local Option TaxesLocal Option Sales Tax 0 292,945 0 2,446,723 0 4,010,887Hotel/Motel Tax 0 0 0 0 0 645,012Wheel Tax 0 2,448,296 0 0 0 4,896,592Litigation Tax - General 0 0 0 557,253 0 674,786Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 0 0 234,483Business Tax 0 0 11,562 550,495 0 1,039,966Mineral Severance Tax 0 534,200 0 0 0 534,200Adequate Facilities/Development Tax 0 0 0 0 0 7,701,375

Statutory Local TaxesBank Excise Tax 0 0 0 0 0 406,255Wholesale Beer Tax 0 0 0 0 0 627,402Interstate Telecommunications Tax 0 0 0 0 0 9,172

Total Local Taxes $ 0 $ 3,277,389 $ 544,973 $ 28,981,863 $ 0 $ 73,956,559


Animal Registration $ 0 $ 0 $ 0 $ 0 $ 0 $ 79,962Animal Vaccination 0 0 0 0 0 19,813Cable TV Franchise 0 0 0 0 0 497,595

PermitsBuilding Permits 0 0 0 0 0 841,124Plumbing Permits 0 0 0 0 0 112,010Food Handling Permits 0 0 0 0 0 4,800Other Permits 0 0 37,700 0 0 123,750

Total Licenses and Permits $ 0 $ 0 $ 37,700 $ 0 $ 0 $ 1,679,054

(Continued)


Debt Service Fund

Capital Projects

Fund

Exhibit M-7





Fines, Forfeitures and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 0 $ 0 $ 94,710Officers Costs 0 0 0 0 0 416,114Drug Control Fines 0 0 0 0 0 108,399Drug Court Fees 0 0 0 0 0 3,247Jail Fees 0 0 0 0 0 369,822District Attorney General Fees 0 0 0 0 0 37,802Data Entry Fee - Circuit Court 0 0 0 0 0 2,858

Criminal CourtDUI Treatment Fines 0 0 0 0 0 12,982Data Entry Fee - Criminal Court 0 0 0 0 0 2,500

General Sessions CourtFines 0 0 0 0 0 423,359Game and Fish Fines 0 0 0 0 0 1,008Drug Control Fines 0 0 0 0 0 170,182Drug Court Fees 0 0 0 0 0 42,711DUI Treatment Fines 0 0 0 0 0 59,285Data Entry Fee - General Sessions Court 0 0 0 0 0 40,395

Juvenile CourtFines 0 0 0 0 0 7,157Drug Court Fees 0 0 0 0 0 4,618Jail Fees 0 0 0 0 0 237,273Data Entry Fee - Juvenile Court 0 0 0 0 0 3,756

Chancery CourtData Entry Fee - Chancery Court 0 0 0 0 0 4,997

Other Courts - In-countyFines 0 0 0 0 0 144,052Drug Court Fees 0 0 0 0 0 2,590District Attorney General Fees 0 0 0 0 0 3,958

Courts in Other District CountiesDistrict Attorney General Fees 0 0 0 0 0 2,051

Judicial District Drug ProgramData Entry Fee - Other Courts 0 0 0 0 0 1,068

(Continued)


Debt Service Fund

Capital Projects

Fund

Exhibit M-7





Fines, Forfeitures and Penalties (Cont.)Other Fines, Forfeitures, and Penalties

Proceeds from Confiscated Property $ 0 $ 0 $ 0 $ 0 $ 0 $ 441,059Total Fines, Forfeitures and Penalties $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,637,953

Charges for Current ServicesGeneral Service Charges

Tipping Fees $ 0 $ 0 $ 0 $ 0 $ 0 $ 108,795Surcharge - Host Agency 0 0 0 0 0 1,375,144Patient Charges 0 0 0 0 0 3,387,119Past Due Collections - Ambulance 0 0 0 0 0 89,037Zoning Studies 0 0 0 0 0 39,675Other General Service Charges 0 0 0 0 0 550

FeesSubdivision Lot Fees 0 0 0 0 0 117,706Recreation Fees 0 0 0 0 0 8,289Telephone Commissions 0 0 0 0 0 185,191Constitutional Officers' Fees and Commissions 4,249,098 0 0 0 0 4,249,098Data Processing Fee - Register 0 0 0 0 0 134,310Probation Fees 0 0 0 0 0 10,088Data Processing Fee - Sheriff 0 0 0 0 0 21,451Sexual Offender Registration Fee 0 0 0 0 0 1,680

Education ChargesContract for Administrative Services with Other LEA's 0 0 0 0 0 90,206

Other Charges for ServicesOther Charges for Services 0 0 0 0 0 4,100

Total Charges for Current Services $ 4,249,098 $ 0 $ 0 $ 0 $ 0 $ 9,822,439


Investment Income $ 0 $ 91,928 $ 0 $ 1,134,647 $ 5,417 $ 2,500,527Lease/Rentals 0 0 0 116,250 0 235,240Sale of Materials and Supplies 0 17,131 0 0 0 29,132Commissary Sales 0 0 0 0 0 154,763

(Continued)


Debt Service Fund

Capital Projects

Fund

Exhibit M-7





Other Local Revenues (Cont.)Recurring Items (Cont.)

Sale of Maps $ 0 $ 0 $ 0 $ 0 $ 0 $ 6,437Sale of Recycled Materials 0 0 0 0 0 38,620Sale of Animals/Livestock 0 0 0 0 0 85,380Miscellaneous Refunds 0 0 0 0 0 30,808

Nonrecurring ItemsAccrued Interest on Debt Issues 0 0 0 284,089 0 284,089Insurance Recovery 0 701 0 0 14,138 140,663Sale of Property 0 0 0 0 0 34,142Contributions & Gifts 0 0 0 0 0 14,973Performance Bond Forfeitures 0 0 0 0 0 39,985

Other Local RevenuesOther Local Revenues 0 0 0 0 0 18,029

Total Other Local Revenues $ 0 $ 109,760 $ 0 $ 1,534,986 $ 19,555 $ 3,612,788

Fees Received from County OfficialsExcess Fees

County Clerk $ 0 $ 0 $ 0 $ 0 $ 0 $ 603,000Circuit Court Clerk 0 0 0 0 0 767,773Register 0 0 0 0 0 1,546,207Trustee 0 0 0 0 0 2,933,921

Fees In Lieu of SalaryClerk and Master 0 0 0 0 0 427,142Sheriff 0 0 0 0 0 48,654

Total Fees Received from County Officials $ 0 $ 0 $ 0 $ 0 $ 0 $ 6,326,697

State of TennesseeGeneral Government Grants

Juvenile Services Program $ 0 $ 0 $ 0 $ 0 $ 0 $ 9,000State Reappraisal Grant 0 0 0 0 0 49,020Solid Waste Grants 0 0 0 0 0 25,724

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 0 0 77,286

(Continued)


Debt Service Fund

Capital Projects

Fund

Exhibit M-7





State of Tennessee (Cont.)Health and Welfare Grants

Health Department Programs $ 0 $ 0 $ 0 $ 0 $ 0 $ 951,294Public Works Grants

State Aid Program 0 332,981 0 0 0 332,981Litter Program 0 0 0 0 0 89,969

Other State RevenuesFlood Control 0 7,609 0 0 0 7,609Income Tax 0 0 0 0 0 128,090Beer Tax 0 0 0 0 0 16,778Alcoholic Beverage Tax 0 0 0 0 0 152,891Mixed Drink Tax 0 0 0 0 0 5,057Contracted Prisoner Boarding 0 0 0 0 0 2,983,368Gasoline and Motor Fuel Tax 0 3,139,230 0 0 0 3,139,230Petroleum Special Tax 0 146,424 0 0 0 146,424Registrar's Salary Supplement 0 0 0 0 0 16,380Other State Grants 0 0 0 0 0 115,909Other State Revenues 0 0 0 0 0 651,226

Total State of Tennessee $ 0 $ 3,626,244 $ 0 $ 0 $ 0 $ 8,898,236


USDA School Lunch Program $ 0 $ 0 $ 0 $ 0 $ 0 $ 24,331Breakfast 0 0 0 0 0 13,273Community Development 0 0 0 0 0 111,310Homeland Security Grants 0 0 0 0 0 678,037Law Enforcement Grants 0 0 0 0 0 18,406Other Federal through State 0 0 151,312 0 0 196,803

Direct Federal RevenuePolice Service (Lake Area) 0 0 0 0 0 40,332Asset Forfeiture Funds 0 0 0 0 0 13,500Public Safety Partnership and Community Policing - COPS 0 0 0 0 0 608,511Other Direct Federal Revenue 0 0 0 0 0 100,000

Total Federal Government $ 0 $ 0 $ 151,312 $ 0 $ 0 $ 1,804,503

(Continued)


Debt Service Fund

Capital Projects

Fund

Exhibit M-7






Prisoner Board $ 0 $ 0 $ 0 $ 0 $ 0 $ 28,092Contributions 0 0 0 0 0 250,000Contracted Services 0 0 0 0 0 172,611

OtherOther 0 0 0 0 0 1,669

Total Other Governments and Citizens Groups $ 0 $ 0 $ 0 $ 0 $ 0 $ 452,372

Total $ 4,249,098 $ 7,013,393 $ 733,985 $ 30,516,849 $ 19,555 $ 109,190,601


Debt Service Fund

Capital Projects

Fund

Exhibit M-8


All Governmental Fund TypesDiscretely Presented Rutherford County School DepartmentFor the Year Ended June 30, 2005

General School Other Purpose Federal Capital School Projects Projects Total


Current Property Tax $ 41,109,798 $ 0 $ 0 $ 41,109,798Trustee's Collections - Prior Year 965,815 0 0 965,815Circuit/Clerk & Master Collections - Prior Years 526,543 0 0 526,543Interest and Penalty 193,541 0 0 193,541Pick-up Taxes 189,655 0 0 189,655Payments in Lieu of Taxes - T.V.A. 7,129 0 0 7,129Payments in Lieu of Taxes - Local Utilities 507,491 0 0 507,491

County Local Option TaxesLocal Option Sales Tax 29,689,180 0 0 29,689,180Wheel Tax 2,751,930 0 0 2,751,930Business Tax 928,868 0 0 928,868

Statutory Local TaxesInterstate Telecommunications Tax 25,619 0 0 25,619

Total Local Taxes $ 76,895,569 $ 0 $ 0 $ 76,895,569


Marriage Licenses $ 14,433 $ 0 $ 0 $ 14,433Total Licenses and Permits $ 14,433 $ 0 $ 0 $ 14,433

Charges for Current ServicesEducation Charges

Tuition - Summer School $ 156,750 $ 0 $ 0 $ 156,750Tuition - Other 46,615 0 0 46,615

Other Charges for ServicesOther Charges for Services 20,000 0 0 20,000

Total Charges for Current Services $ 223,365 $ 0 $ 0 $ 223,365


Investment Income $ 459,682 $ 0 $ 0 $ 459,682Sale of Materials and Supplies 26,803 0 0 26,803Miscellaneous Refunds 444,414 0 0 444,414

Nonrecurring ItemsInsurance Recovery 98,534 0 0 98,534Sale of Equipment 5,428 0 0 5,428Contributions & Gifts 115,053 0 0 115,053

Other Local RevenuesOther Local Revenues 8,162 0 0 8,162

Total Other Local Revenues $ 1,158,076 $ 0 $ 0 $ 1,158,076

State of TennesseeState Education Funds

Basic Education Program $ 89,296,927 $ 0 $ 0 $ 89,296,927School Food Service 127,933 0 0 127,933Driver Education 123,960 0 0 123,960Other State Education Funds 1,331,794 0 0 1,331,794Career Ladder Program 1,469,760 0 0 1,469,760

(Continued)

Exhibit M-8


All Governmental Fund TypesDiscretely Presented Rutherford County School Department (Cont.)

General School Other Purpose Federal Capital School Projects Projects Total

State of Tennessee (Cont.)State Education Funds (Cont.)

Career Ladder - Extended Contract $ 363,235 $ 0 $ 0 $ 363,235Other Vocational 28,375 0 0 28,375

Other State RevenuesMixed Drink Tax 156,335 0 0 156,335State Revenue Sharing - T.V.A. 1,101,511 0 0 1,101,511

Total State of Tennessee $ 93,999,830 $ 0 $ 0 $ 93,999,830


USDA School Lunch Program $ 2,955,677 $ 0 $ 0 $ 2,955,677Breakfast 578,633 0 0 578,633USDA - Other 72,479 0 0 72,479Vocational Education - Basic Grants to States 0 458,880 0 458,880Title I Grants to Local Education Agencies 0 2,003,399 0 2,003,399Innovative Education Program Strategies 0 122,512 0 122,512Special Education - Grants to States 274,910 5,493,264 0 5,768,174Special Education Preschool Grants 0 98,315 0 98,315Eisenhower Professional Development State Grants 0 1,062,621 0 1,062,621Other Federal through State 240,808 464,605 0 705,413

Direct Federal RevenueROTC Reimbursement 419,620 0 0 419,620

Total Federal Government $ 4,542,127 $ 9,703,596 $ 0 $ 14,245,723


Contributions $ 0 $ 0 $ 43,554,061 $ 43,554,061Total Other Governments and Citizens Groups $ 0 $ 0 $ 43,554,061 $ 43,554,061

Total $ 176,833,400 $ 9,703,596 $ 43,554,061 $ 230,091,057

Exhibit M-9

Rutherford County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2005

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 98,600 Other Per Diem & Fees 74,700 Social Security 10,745 Employer Medicare 2,513

Total County Commission $ 186,558

Board of EqualizationBoard and Committee Members Fees $ 3,352 Social Security 205 Employer Medicare 48 Consultants 93,752 Legal Notices, Recording and Court Costs 408

Total Board of Equalization 97,765

County MayorCounty Official/Administrative Officer $ 83,123 Secretary(s) 111,461 Longevity Pay 1,425 Social Security 11,682 State Retirement 22,717 Employee and Dependent Insurance 20,379 Employer Medicare 2,732 Communication 1,320 Dues and Memberships 150 Legal Notices, Recording and Court Costs 12,952 Maintenance Agreements 1,137 Postal Charges 4,052 Travel 215 Duplicating Supplies 1,074 Office Supplies 2,981 Office Equipment 9,693

Total County Mayor 287,093

Personnel OfficeCounty Official/Administrative Officer $ 55,764 Part-time Personnel 14,413 Longevity Pay 175 Social Security 4,155 State Retirement 6,497 Employee and Dependent Insurance 6,777

(Continued)

Exhibit M-9



General Fund (Cont.)General Government (Cont.)

Personnel Office (Cont.)Employer Medicare $ 972 Communication 797 Dues and Memberships 160 Postal Charges 296 Travel 164 Office Supplies 1,086

Total Personnel Office $ 91,256

County AttorneyCounty Official/Administrative Officer $ 95,549 Secretary(s) 63,152 Longevity Pay 1,000 Overtime Pay 831 Social Security 9,310 State Retirement 18,606 Employee and Dependent Insurance 20,331 Employer Medicare 2,256 Communication 1,522 Dues and Memberships 2,500 Maintenance & Repair Services- Equipment 180 Postal Charges 416 Travel 1,900 Office Supplies 1,243

Total County Attorney 218,796

Election CommissionCounty Official/Administrative Officer $ 64,772 Part-time Personnel 23,472 Longevity Pay 1,050 Overtime Pay 9,588 Other Salaries & Wages 156,784 Election Commission 11,625 Election Workers 131,689 In-Service Training 3,786 Social Security 20,719 State Retirement 26,905 Employee and Dependent Insurance 22,167 Employer Medicare 4,846 Communication 19,032 Dues and Memberships 1,015

(Continued)

Exhibit M-9




Election CommissionLegal Notices, Recording and Court Costs $ 17,905 Maintenance Agreements 6,746 Postal Charges 20,493 Printing, Stationery and Forms 11,208 Rentals 2,579 Travel 5,227 Data Processing Supplies 2,959 Office Supplies 9,172 Data Processing Equipment 3,503

Total Election Commission $ 577,242

Register of DeedsIn-Service Training $ 65 Communication 1,669 Data Processing Services 32,784 Operating Lease Payments 6,965 Maintenance Agreements 4,870 Postal Charges 15,229 Travel 272 Other Contracted Services 17,878 Data Processing Supplies 7,145 Office Supplies 6,703 Other Supplies and Materials 160 Data Processing Equipment 8,719

Total Register of Deeds 102,459

PlanningCounty Official/Administrative Officer $ 62,500 Assistant(s) 157,406 Supervisor/Director 56,476 Secretary(s) 67,710 Part-time Personnel 13,704 Longevity Pay 1,625 Board and Committee Members Fees 28,500 In-Service Training 6,666 Social Security 23,277 State Retirement 39,468 Employee and Dependent Insurance 40,959 Employer Medicare 5,444 Communication 3,216

(Continued)

Exhibit M-9




Planning (Cont.)Dues and Memberships $ 1,198 Legal Notices, Recording and Court Costs 4,204 Maintenance Agreements 6,074 Maintenance & Repair Services- Office Equipment 371 Postal Charges 3,422 Printing, Stationery and Forms 965 Data Processing Supplies 2,627 Gasoline 2,705 Office Supplies 7,736 Periodicals 1,177

Total Planning $ 537,430

Codes ComplianceSecretary(s) $ 28,148 Longevity Pay 375 Social Security 1,633 State Retirement 3,306 Employee and Dependent Insurance 7,794 Employer Medicare 382 Communication 1,887

Total Codes Compliance 43,525

Geographical Information SystemsData Processing Personnel $ 29,955 Part-time Personnel 4,909 Longevity Pay 200 Overtime Pay 6,319 Social Security 2,589 State Retirement 4,227 Employee and Dependent Insurance 4,743 Employer Medicare 606 Data Processing Services 30,012 Dues and Memberships 150 Maintenance Agreements 19,929 Travel 4,542 Data Processing Supplies 43,831 Data Processing Equipment 95,092 Other Capital Outlay 399,756

Total Geographical Information Systems 646,860

(Continued)

Exhibit M-9




County BuildingsSupervisor/Director $ 43,095 Custodial Personnel 60,140 Maintenance Personnel 70,679 Part-time Personnel 97,494 Longevity Pay 1,275 Overtime Pay 4,359 Social Security 16,664 State Retirement 20,801 Employee and Dependent Insurance 36,043 Employer Medicare 3,897 Communication 58,802 Maintenance & Repair Services- Buildings 31,042 Travel 1,206 Other Contracted Services 44,258 Custodial Supplies 13,030 Data Processing Supplies 357 Gasoline 5,284 Utilities 249,193 Other Supplies and Materials 47,872 Building Improvements 39,460 Maintenance Equipment 3,975

Total County Buildings $ 848,926

Other General AdministrationSupervisor/Director $ 56,856 Teachers 82,190 Salary Supplements 4,500 Longevity Pay 850 Social Security 8,690 State Retirement 16,757 Employee and Dependent Insurance 13,828 Employer Medicare 2,032 Communication 390 Travel 391 Riprap 826 Other Supplies and Materials 187

Total Other General Administration 187,497

Preservation of RecordsOther Salaries & Wages $ 1,949

(Continued)

Exhibit M-9




Preservation of Records (Cont.)Social Security $ 121 Employer Medicare 28 Communication 196 Dues and Memberships 480 Maintenance Agreements 242 Postal Charges 271 Library Books/Media 195 Office Supplies 2,115 Other Supplies and Materials 180 Other Charges 23,831 Data Processing Equipment 1,200

Total Preservation of Records $ 30,808

Risk ManagementSupervisor/Director $ 56,212 Clerical Personnel 56,938 Longevity Pay 775 Other Salaries & Wages 28,405 Social Security 8,637 State Retirement 15,682 Employee and Dependent Insurance 24,259 Employer Medicare 2,020 Communication 2,000 Maintenance Agreements 1,445 Postal Charges 1,636 Travel 502 Gasoline 635 Office Supplies 2,057 Other Supplies and Materials 265 Data Processing Equipment 919

Total Risk Management 202,387

FinanceAccounting and Budgeting

County Official/Administrative Officer $ 70,700 Accountants/Bookkeepers 327,138 Salary Supplements 7,200 Clerical Personnel 21,352 Part-time Personnel 5,673 Longevity Pay 3,350

(Continued)

Exhibit M-9



General Fund (Cont.)Finance (Cont.)

Accounting and Budgeting (Cont.)Overtime Pay $ 10,032 Other Salaries & Wages 45,380 Social Security 29,484 State Retirement 56,233 Employee and Dependent Insurance 53,628 Employer Medicare 6,896 Communication 1,810 Dues and Memberships 2,108 Maintenance Agreements 5,265 Maintenance & Repair Services- Equipment 564 Postal Charges 8,637 Travel 4,667 Office Supplies 22,782 Data Processing Equipment 10,153

Total Accounting and Budgeting $ 693,052

Property Assessor's OfficeCounty Official/Administrative Officer $ 71,969 Deputy(ies) 630,151 Salary Supplements 5,000 Longevity Pay 5,025 Overtime Pay 4,941 In-Service Training 4,223 Social Security 42,467 State Retirement 82,475 Employee and Dependent Insurance 108,393 Employer Medicare 9,931 Communication 5,789 Data Processing Services 47,017 Operating Lease Payments 6,077 Maintenance & Repair Services- Equipment 889 Postal Charges 8,175 Travel 1,919 Other Contracted Services 316,410 Data Processing Supplies 173 Gasoline 672 Office Supplies 16,374 Other Supplies and Materials 15,038 Data Processing Equipment 400,820

Total Property Assessor's Office 1,783,928

(Continued)

Exhibit M-9




Reappraisal ProgramDeputy(ies) $ 253,366 Longevity Pay 2,125 Overtime Pay 1,166 Social Security 15,148 State Retirement 29,747 Employee and Dependent Insurance 49,952 Employer Medicare 3,543 Communication 1,147 Data Processing Services 19,783 Maintenance & Repair Services- Vehicles 70 Postal Charges 1,000 Data Processing Supplies 2,333 Gasoline 6,797 Other Supplies and Materials 2,413 Data Processing Equipment 5,846

Total Reappraisal Program $ 394,436

County Trustee's OfficeCommunication $ 1,645 Legal Notices, Recording and Court Costs 311 Maintenance Agreements 558 Postal Charges 27,072 Office Supplies 5,540 Other Supplies and Materials 249 Data Processing Equipment 4,529

Total County Trustee's Office 39,904

County Clerk's OfficeCommunication $ 10,619 Data Processing Services 34,487 Operating Lease Payments 30,000 Maintenance Agreements 5,749 Maintenance & Repair Services- Equipment 889 Postal Charges 28,585 Gasoline 551 Office Supplies 28,129 Other Supplies and Materials 1,497 Data Processing Equipment 19,919

Total County Clerk's Office 160,425

(Continued)

Exhibit M-9




Data ProcessingCounty Official/Administrative Officer $ 66,595 Data Processing Personnel 233,553 Part-time Personnel 15,686 Longevity Pay 900 Overtime Pay 14,167 Social Security 20,130 State Retirement 36,612 Employee and Dependent Insurance 35,970 Employer Medicare 4,708 Communication 54,641 Data Processing Services 59,969 Postal Charges 86 Travel 5,176 Data Processing Supplies 17,850 Data Processing Equipment 37,993 Office Equipment 859

Total Data Processing $ 604,895

Administration of JusticeCircuit Court

Jury and Witness Fees $ 40,862 Communication 3,299 Data Processing Services 81,048 Maintenance Agreements 1,242 Postal Charges 20,919 Office Supplies 49,728 Other Supplies and Materials 1,240 Other Charges 83,400 Furniture and Fixtures 1,976 Office Equipment 10,697

Total Circuit Court 294,411

Circuit Court JudgeAssistant(s) $ 34,402 Deputy(ies) 113,597 Longevity Pay 450 Social Security 9,008 State Retirement 17,147 Employee and Dependent Insurance 18,842 Employer Medicare 2,106

(Continued)

Exhibit M-9



General Fund (Cont.)Administration of Justice (Cont.)

Circuit Court Judge (Cont.)Postal Charges $ 583 Printing, Stationery and Forms 210 Travel 732 Office Supplies 500 Uniforms 482 Other Equipment 14,963

Total Circuit Court Judge $ 213,022

General Sessions CourtJudge(s) $ 224,170 Assistant(s) 38,713 Deputy(ies) 52,869 Part-time Personnel 11,128 Longevity Pay 1,400 Overtime Pay 2,067 Other Salaries & Wages 219,911 Social Security 30,613 State Retirement 62,428 Employee and Dependent Insurance 69,697 Employer Medicare 7,820 Communication 2,733 Data Processing Services 16,800 Dues and Memberships 1,370 Maintenance Agreements 1,458 Maintenance & Repair Services- Office Equipment 357 Postal Charges 12 Travel 1,891 Library Books/Media 2,042 Office Supplies 3,570 Uniforms 134 Data Processing Equipment 3,489

Total General Sessions Court 754,672

Drug CourtSupervisor/Director $ 44,860 Secretary(s) 23,299 Longevity Pay 75 Other Salaries & Wages 71,055 Social Security 8,498 State Retirement 16,143

(Continued)

Exhibit M-9




Drug Court (Cont.)Employee and Dependent Insurance $ 6,468 Employer Medicare 1,987 Communication 8,992 Maintenance Agreements 693 Postal Charges 389 Rentals 13,100 Travel 28,428 Other Contracted Services 18,303 Office Supplies 1,716 Other Supplies and Materials 19,943 Data Processing Equipment 1,220 Furniture and Fixtures 1,298

Total Drug Court $ 266,467

Chancery CourtCounty Official/Administrative Officer $ 71,969 Deputy(ies) 278,353 Attendants 25,708 Part-time Personnel 25,688 Longevity Pay 2,225 Overtime Pay 172 Jury and Witness Fees 1,900 Social Security 24,208 State Retirement 43,869 Employee and Dependent Insurance 58,530 Employer Medicare 5,662 Communication 2,777 Data Processing Services 5,307 Dues and Memberships 675 Legal Notices, Recording and Court Costs 8,579 Maintenance Agreements 4,604 Postal Charges 13,332 Travel 1,296 Other Contracted Services 445 Office Supplies 14,978 Data Processing Equipment 1,931 Office Equipment 23,107

Total Chancery Court 615,315

(Continued)

Exhibit M-9




Juvenile CourtJudge(s) $ 71,969 Deputy(ies) 26,221 Secretary(s) 23,570 Social Security 7,457 State Retirement 14,112 Employee and Dependent Insurance 14,229 Employer Medicare 1,744 Communication 1,521 Dues and Memberships 1,090 Postal Charges 70 Travel 1,471 Other Contracted Services 21,131 Library Books/Media 2,171 Office Supplies 1,550 Other Supplies and Materials 812 Data Processing Equipment 2,565

Total Juvenile Court $ 191,683

District Attorney GeneralAssistant(s) $ 36,289 In-Service Training 100 Social Security 2,250 State Retirement 4,206 Employee and Dependent Insurance 48 Employer Medicare 526 Data Processing Services 3,956 Travel 1,274 Office Supplies 232

Total District Attorney General 48,881

Other Administration of JusticePart-time Personnel $ 8,344 Other Salaries & Wages 36,761 In-Service Training 220 Social Security 2,722 State Retirement 4,261 Employee and Dependent Insurance 3,921 Employer Medicare 637 Communication 449 Maintenance Agreements 950

(Continued)

Exhibit M-9




Other Administration of Justice (Cont.)Postal Charges $ 139 Printing, Stationery and Forms 63 Other Contracted Services 4,315 Office Supplies 646

Total Other Administration of Justice $ 63,428

Probation ServicesCounty Official/Administrative Officer $ 43,999 Assistant(s) 35,606 Youth Service Officer(s) 117,741 Secretary(s) 24,404 Longevity Pay 725 In-Service Training 700 Social Security 13,465 State Retirement 25,899 Employee and Dependent Insurance 36,106 Employer Medicare 3,149 Communication 2,319 Contracts with Private Agencies 553,903 Data Processing Services 2,400 Maintenance Agreements 510 Maintenance & Repair Services- Equipment 212 Postal Charges 274 Printing, Stationery and Forms 878 Travel 2,464 Office Supplies 1,723 Data Processing Equipment 7,600 Office Equipment 5,600

Total Probation Services 879,677

Public SafetySheriff's Department

County Official/Administrative Officer $ 79,165 Deputy(ies) 787,629 Salary Supplements 77,286 Part-time Personnel 263,842 Longevity Pay 37,850 Overtime Pay 398,974 Other Salaries & Wages 6,399,597 In-Service Training 68,621

(Continued)

Exhibit M-9



General Fund (Cont.)Public Safety (Cont.)

Sheriff's Department (Cont.)Other Per Diem & Fees $ 13,349 Social Security 490,988 State Retirement 901,805 Employee and Dependent Insurance 998,263 Employer Medicare 114,821 Communication 115,785 Contracts with Private Agencies 900 Data Processing Services 4,676 Dues and Memberships 10,411 Maintenance Agreements 3,665 Maintenance & Repair Services- Equipment 18,551 Maintenance & Repair Services- Vehicles 121,608 Medical and Dental Services 2,393 Postal Charges 7,664 Printing, Stationery and Forms 8,823 Other Contracted Services 3,000 Data Processing Supplies 8,362 Gasoline 315,775 Instructional Supplies and Materials 6,430 Law Enforcement Supplies 60,494 Office Supplies 24,479 Periodicals 4,560 Uniforms 85,910 Vehicle Parts 136,551 Other Supplies and Materials 19,947 Judgments 9,598 Refunds 68 Other Charges 3,997 Communication Equipment 25,043 Data Processing Equipment 34,333 Law Enforcement Equipment 166,158 Motor Vehicles 490,460 Office Equipment 22,994

Total Sheriff's Department $ 12,344,825

Special PatrolsNightwatchmen $ 38,450 Social Security 2,383 State Retirement 4,457 Employer Medicare 557

Total Special Patrols 45,847

(Continued)

Exhibit M-9




Traffic ControlUtilities $ 9,398

Total Traffic Control $ 9,398

Wheel Tax OfficerCounty Official/Administrative Officer $ 35,114 Longevity Pay 325 Social Security 1,998 State Retirement 4,107 Employee and Dependent Insurance 7,794 Employer Medicare 467 Communication 1,191 Maintenance & Repair Services- Equipment 485 Maintenance & Repair Services- Vehicles 447 Postal Charges 110 Gasoline 1,261 Office Supplies 671 Uniforms 436 Other Supplies and Materials 553 Motor Vehicles 20,384

Total Wheel Tax Officer 75,343

JailMaintenance Personnel $ 27,556 Part-time Personnel 104,925 Longevity Pay 12,050 Overtime Pay 96,112 Other Salaries & Wages 3,381,710 In-Service Training 12,880 Social Security 220,035 State Retirement 403,250 Employee and Dependent Insurance 606,615 Employer Medicare 51,457 Dues and Memberships 978 Maintenance Agreements 30,434 Maintenance & Repair Services- Buildings 74,464 Maintenance & Repair Services- Equipment 16,275 Medical and Dental Services 1,039,879 Printing, Stationery and Forms 2,592 Transportation - Other than Students 26,786 Other Contracted Services 4,536

(Continued)

Exhibit M-9




Jail (Cont.)Custodial Supplies $ 66,810 Data Processing Supplies 5,864 Drugs and Medical Supplies 419,091 Food Preparation Supplies 39,333 Food Supplies 984,522 Law Enforcement Supplies 6,891 Office Supplies 7,414 Periodicals 3,270 Prisoners Clothing 44,016 Uniforms 35,813 Utilities 513,308 Other Supplies and Materials 25,933 Data Processing Equipment 5,149

Total Jail $ 8,269,948

WorkhouseCounty Official/Administrative Officer $ 54,037 Captain(s) 46,729 Lieutenant(s) 37,714 Sergeant(s) 111,608 Guards 498,466 Secretary(s) 31,330 Clerical Personnel 28,529 Part-time Personnel 21,309 Longevity Pay 2,875 Overtime Pay 3,424 Board and Committee Members Fees 4,600 In-Service Training 2,654 Social Security 50,874 State Retirement 94,477 Employee and Dependent Insurance 115,324 Employer Medicare 11,897 Communication 3,929 Dues and Memberships 375 Evaluation and Testing 1,330 Operating Lease Payments 1,333 Maintenance & Repair Services- Buildings 17,154 Maintenance & Repair Services- Equipment 8,710 Maintenance & Repair Services- Vehicles 2,223 Medical and Dental Services 86,947

(Continued)

Exhibit M-9




Workhouse (Cont.)Pest Control $ 825 Postal Charges 302 Printing, Stationery and Forms 45 Other Contracted Services 12,323 Custodial Supplies 19,115 Data Processing Supplies 2,883 Drugs and Medical Supplies 43,862 Equipment and Machinery Parts 3,400 Food Supplies 256,337 Gasoline 2,505 Law Enforcement Supplies 1,409 Office Supplies 5,828 Prisoners Clothing 11,405 Uniforms 7,763 Utilities 103,892 Other Supplies and Materials 15,184 Data Processing Equipment 4,927

Total Workhouse $ 1,729,853

Juvenile ServicesCounty Official/Administrative Officer $ 45,504 Assistant(s) 33,259 Supervisor/Director 29,390 Salary Supplements 13,200 Guards 100,514 Attendants 132,926 Part-time Personnel 153,140 Longevity Pay 600 Overtime Pay 25,551 In-Service Training 2,160 Social Security 32,831 State Retirement 42,963 Employee and Dependent Insurance 47,891 Employer Medicare 7,678 Communication 4,425 Data Processing Services 3,956 Maintenance Agreements 2,960 Maintenance & Repair Services- Buildings 5,248 Maintenance & Repair Services- Equipment 279 Maintenance & Repair Services- Vehicles 682

(Continued)

Exhibit M-9




Juvenile Services (Cont.)Postal Charges $ 381 Printing, Stationery and Forms 1,800 Travel 793 Other Contracted Services 7,999 Food Supplies 45,528 Gasoline 1,592 Office Supplies 786 Uniforms 3,149 Other Supplies and Materials 22,644 Data Processing Equipment 932

Total Juvenile Services $ 770,761

Rescue SquadContributions $ 59,000

Total Rescue Squad 59,000

Disaster ReliefCounty Official/Administrative Officer $ 58,775 Assistant(s) 41,067 Supervisor/Director 36,751 Secretary(s) 26,733 Longevity Pay 700 In-Service Training 1,294 Social Security 9,907 State Retirement 19,011 Employee and Dependent Insurance 21,973 Employer Medicare 2,317 Communication 10,432 Consultants 12,100 Contracts with Government Agencies 123,919 Contributions 2,000 Dues and Memberships 984 Maintenance Agreements 1,799 Maintenance & Repair Services- Vehicles 1,280 Postal Charges 240 Printing, Stationery and Forms 438 Travel 2,913 Other Contracted Services 1,690 Electricity 27 Gasoline 3,078

(Continued)

Exhibit M-9




Disaster Relief (Cont.)Instructional Supplies and Materials $ 1,615 Office Supplies 1,780 Uniforms 1,745 Other Supplies and Materials 18,463 Communication Equipment 3,650 Data Processing Equipment 21,909 Land 75,027 Motor Vehicles 11,886 Office Equipment 4,712 Other Equipment 657,119

Total Disaster Relief $ 1,177,334

Inspection and RegulationCounty Official/Administrative Officer $ 58,434 Deputy(ies) 269,706 Clerical Personnel 90,524 Longevity Pay 2,775 Overtime Pay 5,269 Board and Committee Members Fees 200 Social Security 25,646 State Retirement 49,455 Employee and Dependent Insurance 56,307 Employer Medicare 5,997 Communication 7,578 Data Processing Services 664 Dues and Memberships 1,042 Maintenance Agreements 2,404 Maintenance & Repair Services- Office Equipment 35 Postal Charges 1,353 Printing, Stationery and Forms 2,004 Travel 4,520 Other Contracted Services 4,518 Gasoline 9,347 Office Supplies 6,203 Uniforms 533 Other Supplies and Materials 858 In Service/Staff Development 730 Data Processing Equipment 2,932 Motor Vehicles 13,631

Total Inspection and Regulation 622,665

(Continued)

Exhibit M-9



General Fund (Cont.)Public Health and Welfare

Local Health CenterLongevity Pay $ 1,275 Other Salaries & Wages 197,150 Social Security 11,900 State Retirement 22,998 Employee and Dependent Insurance 25,211 Employer Medicare 2,783 Communication 14,783 Contracts with Government Agencies 128,375 Maintenance & Repair Services- Buildings 3,948 Maintenance & Repair Services- Equipment 3,413 Travel 1,165 Other Contracted Services 39,772 Drugs and Medical Supplies 13,326 Utilities 44,837 Other Supplies and Materials 3,437

Total Local Health Center $ 514,373

Rabies and Animal ControlCounty Official/Administrative Officer $ 41,810 Supervisor/Director 58,655 Secretary(s) 22,768 Attendants 211,908 Part-time Personnel 2,719 Longevity Pay 1,100 Overtime Pay 21,314 In-Service Training 2,250 Social Security 21,954 State Retirement 41,458 Employee and Dependent Insurance 41,141 Employer Medicare 5,135 Advertising 56 Bank Charges 58 Communication 15,610 Dues and Memberships 524 Maintenance Agreements 3,000 Maintenance & Repair Services- Buildings 1,548 Maintenance & Repair Services- Vehicles 5,089 Medical and Dental Services 425 Postal Charges 145 Travel 7,680

(Continued)

Exhibit M-9



General Fund (Cont.)Public Health and Welfare (Cont.)

Rabies and Animal Control (Cont.)Veterinary Services $ 54,646 Other Contracted Services 41,520 Animal Food and Supplies 5,327 Custodial Supplies 3,774 Data Processing Supplies 434 Drugs and Medical Supplies 12,503 Gasoline 13,606 Office Supplies 4,867 Uniforms 2,959 Utilities 23,953 Other Supplies and Materials 6,019 Refunds 416 Data Processing Equipment 4,614 Motor Vehicles 17,699

Total Rabies and Animal Control $ 698,684

Ambulance/Emergency Medical ServicesCounty Official/Administrative Officer $ 65,903 Supervisor/Director 277,095 Accountants/Bookkeepers 213,265 Paraprofessionals 2,756,251 Foremen 52,481 Dispatchers/Radio Operators 346,114 Custodial Personnel 21,422 Part-time Personnel 11,400 Longevity Pay 18,425 Overtime Pay 285,916 In-Service Training 34,497 Social Security 244,571 State Retirement 467,110 Employee and Dependent Insurance 513,935 Employer Medicare 57,199 Communication 85,513 Contracts with Private Agencies 42,097 Evaluation and Testing 23,858 Maintenance & Repair Services- Buildings 30,322 Maintenance & Repair Services- Vehicles 87,595 Medical and Dental Services 11,075 Pest Control 3,612 Postal Charges 15,364

(Continued)

Exhibit M-9




Ambulance/Emergency Medical Services (Cont.)Printing, Stationery and Forms $ 6,180 Travel 5,876 Other Contracted Services 3,264 Custodial Supplies 8,274 Data Processing Supplies 9,835 Drugs and Medical Supplies 235,870 Gasoline 70,454 Instructional Supplies and Materials 8,571 Office Supplies 16,357 Uniforms 62,847 Utilities 45,455 Other Supplies and Materials 28,647 Refunds 38,729 Other Charges 40,182 Building Improvements 33,167 Data Processing Equipment 43,596 Motor Vehicles 323,415 Other Equipment 1,362

Total Ambulance/Emergency Medical Services $ 6,647,101

Nursing HomeBuilding Improvements $ 27,737

Total Nursing Home 27,737

Dental Health ProgramMedical and Dental Services $ 10,736

Total Dental Health Program 10,736

Other Local Health ServicesMedical Personnel $ 778,877 Longevity Pay 2,675 Social Security 46,419 State Retirement 87,783 Employee and Dependent Insurance 140,550 Employer Medicare 10,856 Postal Charges 1,500 Printing, Stationery and Forms 2,540 Travel 9,151 Other Supplies and Materials 3,818

Total Other Local Health Services 1,084,169

(Continued)

Exhibit M-9




General Welfare AssistanceContributions $ 31,531

Total General Welfare Assistance $ 31,531

Sanitation ManagementContracts with Private Agencies $ 14,382

Total Sanitation Management 14,382

Other Public Health and WelfareMedical and Dental Services $ 13,200 Other Contracted Services 104,550

Total Other Public Health and Welfare 117,750

Social, Cultural and Recreational ServicesAdult Activities

Contributions $ 24,570 Total Adult Activities 24,570

Senior Citizens AssistanceContributions $ 1,500

Total Senior Citizens Assistance 1,500

LibrariesContributions $ 786,000

Total Libraries 786,000

Parks and Fair BoardsSupervisor/Director $ 16,250 Other Salaries & Wages 117,978 Board and Committee Members Fees 2,850 Social Security 8,499 Employer Medicare 1,988 Contributions 73,001 Maintenance & Repair Services- Buildings 2,297 Matching Share 15,000 Postal Charges 57 Travel 947 Other Contracted Services 20,000 Equipment and Machinery Parts 12,933 Office Supplies 222 Other Supplies and Materials 1,675

Total Parks and Fair Boards 273,697

(Continued)

Exhibit M-9



General Fund (Cont.)Agriculture & Natural Resources

Agriculture Extension ServiceTeachers $ 51,289 Secretary(s) 50,800 Part-time Personnel 47,287 Longevity Pay 475 Board and Committee Members Fees 2,800 Social Security 9,220 State Retirement 11,887 Employee and Dependent Insurance 22,856 Employer Medicare 2,157 Communication 3,278 Contracts with Government Agencies 148,464 Contributions 5,500 Data Processing Services 282 Maintenance & Repair Services- Vehicles 1,382 Postal Charges 1,998 Travel 3,808 Other Contracted Services 9,007 Fertilizer, Lime and Seed 773 Gasoline 732 Utilities 52,808 Other Supplies and Materials 2,008 Data Processing Equipment 2,984 Furniture and Fixtures 5,469

Total Agriculture Extension Service $ 437,264

Soil ConservationAssistant(s) $ 27,556 Longevity Pay 150 Social Security 1,594 State Retirement 3,211 Employee and Dependent Insurance 7,794 Employer Medicare 373 Contributions 8,000

Total Soil Conservation 48,678

Other OperationsTourism

Contributions $ 225,753 Total Tourism 225,753

(Continued)

Exhibit M-9



General Fund (Cont.)Other Operations (Cont.)

Other Economic and Community DevelopmentContracts with Other Public Agencies $ 2,590 Other Contracted Services 111,505

Total Other Economic and Community Development $ 114,095

Other ChargesMechanic(s) $ 35,888 Laborers 48,443 Longevity Pay 800 Overtime Pay 867 Social Security 5,064 State Retirement 9,967 Employee and Dependent Insurance 18,128 Employer Medicare 1,184 Communication 1,721 Equipment and Machinery Parts 567 Gasoline 5,327 Utilities 15,845 Vehicle Parts 25,561 Other Supplies and Materials 9,121

Total Other Charges 178,483

Employee BenefitsUnemployment Compensation $ 22,594 Other Fringe Benefits 46,987 Workers' Compensation Insurance 900,000

Total Employee Benefits 969,581

Payments to CitiesContracts with Government Agencies $ 1,622,124

Total Payments to Cities 1,622,124

MiscellaneousAudit Services $ 41,115 Consultants 19,423 Contributions 417,875 Dues and Memberships 25,771 Engineering Services 388 Legal Services 78,915 Maintenance & Repair Services- Buildings 86,204 Maintenance & Repair Services- Office Equipment 3,162

(Continued)

Exhibit M-9



General Fund (Cont.)Other Operations (Cont.)

Miscellaneous (Cont.)Travel $ 547 Building and Contents Insurance 35,574 Judgments 583,901 Liability Insurance 489,864 Premiums on Corporate Surety Bonds 2,017 Trustee's Commission 663,457 Tax Relief Program 139,029 Other Charges 27,123

Total Miscellaneous $ 2,614,365

Total General Fund $ 52,610,345

Solid Waste/Sanitation FundPublic Health and Welfare

Sanitation Education/InformationLaborers $ 31,648 Part-time Personnel 25,462 Longevity Pay 475 Social Security 3,523 State Retirement 3,727 Employee and Dependent Insurance 5,393 Employer Medicare 824 Travel 39 Instructional Supplies and Materials 3,117 Other Supplies and Materials 8,398

Total Sanitation Education/Information $ 82,606

Convenience CentersSupervisor/Director $ 40,465 Foremen 29,062 Truck Drivers 266,806 Laborers 270,733 Clerical Personnel 22,968 Maintenance Personnel 27,582 Part-time Personnel 3,655 Longevity Pay 2,400 Overtime Pay 19,414 Social Security 40,187 State Retirement 49,482 Employee and Dependent Insurance 83,181

(Continued)

Exhibit M-9



Solid Waste/Sanitation Fund (Cont.)Public Health and Welfare (Cont.)

Convenience Centers (Cont.)Employer Medicare $ 9,696 Communication 15,504 Evaluation and Testing 555 Maintenance & Repair Services- Equipment 7,897 Maintenance & Repair Services- Vehicles 91,211 Postal Charges 5 Rentals 13,260 Tow-in Services 475 Travel 1,368 Other Contracted Services 14,095 Crushed Stone 4,954 Data Processing Supplies 243 Diesel Fuel 93,568 Equipment and Machinery Parts 54,060 Gasoline 6,279 Office Supplies 96 Tires and Tubes 36,195 Uniforms 5,084 Utilities 10,006 Fencing 6,000 Other Supplies and Materials 14,994 Building Construction 400 Building Improvements 775 Communication Equipment 459 Motor Vehicles 92,875 Solid Waste Equipment 45,000

Total Convenience Centers $ 1,380,989

Other Waste CollectionContracts with Private Agencies $ 237,655 Other Supplies and Materials 408 Solid Waste Equipment 46,409

Total Other Waste Collection 284,472

Landfill Operation and MaintenanceSupervisor/Director $ 31,493 Salary Supplements 10,230 Mechanic(s) 25,733 Laborers 61,458 Clerical Personnel 21,392

(Continued)

Exhibit M-9




Landfill Operation and Maintenance (Cont.)Part-time Personnel $ 7,993 Longevity Pay 1,475 Overtime Pay 3,000 Social Security 9,857 State Retirement 17,926 Employee and Dependent Insurance 23,799 Employer Medicare 2,305 Advertising 903 Communication 5,442 Contracts with Private Agencies 183,214 Engineering Services 5,050 Maintenance & Repair Services- Equipment 1,125 Maintenance & Repair Services- Vehicles 474 Postal Charges 61 Travel 2,238 Disposal Fees 121,842 Other Contracted Services 1,619 Crushed Stone 9,316 Custodial Supplies 15 Diesel Fuel 8,768 Electricity 2,653 Equipment Parts - Light 975 Equipment and Machinery Parts 10,782 Fertilizer, Lime and Seed 6,454 Garage Supplies 2,700 Gasoline 2,369 Lubricants 281 Pipe 835 Propane Gas 1,687 Small Tools 1,792 Tires and Tubes 1,350 Uniforms 3,246 Vehicle Parts 546 Drainage Materials 2,131 Other Supplies and Materials 5,276 Data Processing Equipment 1,649

Total Landfill Operation and Maintenance $ 601,454

Postclosure Care CostsContracts with Private Agencies $ 79,908

(Continued)

Exhibit M-9




Postclosure Care Costs (Cont.)Engineering Services $ 2,440 Contracts for Postclosure Care Costs 4,241 Crushed Stone 2,245 Testing 6,062

Total Postclosure Care Costs $ 94,896

Other OperationsEmployee Benefits

Unemployment Compensation $ 5,388 Workers' Compensation Insurance 30,500


MiscellaneousBuilding and Contents Insurance $ 538 Judgments 32,500 Liability Insurance 16,254 Trustee's Commission 44,554

Total Miscellaneous 93,846

Total Solid Waste/Sanitation Fund $ 2,574,151

Industrial/Economic Development FundOther Operations

Industrial DevelopmentContracts with Other Public Agencies $ 105,280 Contributions 96,500 Trustee's Commission 1,253

Total Industrial Development $ 203,033

Payments to CitiesContracts with Government Agencies $ 17,030

Total Payments to Cities 17,030

Total Industrial/Economic Development Fund 220,063

Drug Control FundPublic Safety

Drug EnforcementLongevity Pay $ 1,100 Overtime Pay 49,532

(Continued)

Exhibit M-9



Drug Control Fund (Cont.)Public Safety (Cont.)

Drug Enforcement (Cont.)Other Salaries & Wages $ 215,646 In-Service Training 23,778 Social Security 15,996 State Retirement 30,862 Employee and Dependent Insurance 43,459 Employer Medicare 3,741 Confidential Drug Enforcement Payments 115,000 Maintenance & Repair Services- Vehicles 14,730 Veterinary Services 731 Animal Food and Supplies 329 Law Enforcement Supplies 1,914 Uniforms 901 Other Supplies and Materials 7,611 Trustee's Commission 7,509 Law Enforcement Equipment 72,445 Motor Vehicles 199,752

Total Drug Enforcement $ 805,036

Total Drug Control Fund $ 805,036

Adequate Facilities/Development Tax FundGeneral Government

Other General AdministrationTrustee's Commission $ 77,776

Total Other General Administration $ 77,776

Other OperationsContributions to Other Agencies

Contributions $ 804,061 Total Contributions to Other Agencies 804,061

Capital ProjectsGeneral Administration Projects

Building Construction $ 87,893 Total General Administration Projects 87,893

Social, Cultural and Recreation ProjectsContracts with Government Agencies $ 100,000

Total Social, Cultural and Recreation Projects 100,000

Total Adequate Facilities/Development Tax Fund 1,069,730

(Continued)

Exhibit M-9



District Attorney General FundGeneral Government

Other General AdministrationTrustee's Commission $ 836

Total Other General Administration $ 836

Administration of JusticeDistrict Attorney General

Part-time Personnel $ 502 Social Security 31 Employer Medicare 7 Other Supplies and Materials 50,663

Total District Attorney General 51,203

Total District Attorney General Fund $ 52,039

Constitutional Officers - Fees FundGeneral Government

Register of DeedsConstitutional Officers' Operating Expenses $ 635,890

Total Register of Deeds $ 635,890

FinanceCounty Trustee's Office

Constitutional Officers' Operating Expenses $ 391,425 Total County Trustee's Office 391,425

County Clerk's OfficeConstitutional Officers' Operating Expenses $ 1,383,748

Total County Clerk's Office 1,383,748

Administration of JusticeCircuit Court Judge

Constitutional Officers' Operating Expenses $ 1,400,844 Total Circuit Court Judge 1,400,844

Total Constitutional Officers - Fees Fund 3,811,907

Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 79,165 Assistant(s) 49,648

(Continued)

Exhibit M-9



Highway/Public Works Fund (Cont.)Highways (Cont.)

Administration (Cont.)Secretary(s) $ 62,197 Longevity Pay 850 Overtime Pay 248 Board and Committee Members Fees 23,850 Social Security 13,077 State Retirement 22,265 Employee and Dependent Insurance 20,331 Employer Medicare 3,058 Dues and Memberships 5,279 Legal Notices, Recording and Court Costs 1,010 Maintenance & Repair Services- Office Equipment 683 Postal Charges 775 Printing, Stationery and Forms 1,627 Travel 285 Drugs and Medical Supplies 765 Office Supplies 1,416 Office Equipment 1,476

Total Administration $ 288,005

Highway and Bridge MaintenanceForemen $ 210,515 Equipment Operators 565,884 Truck Drivers 303,352 Laborers 40,552 Longevity Pay 8,475 Overtime Pay 10,961 Social Security 67,474 State Retirement 130,733 Employee and Dependent Insurance 244,426 Employer Medicare 15,781 Engineering Services 10,139 Other Contracted Services 67,284 Asphalt 2,131,948 General Construction Materials 7,579 Pipe - Metal 42,560 Road Signs 15,807 Uniforms 19,249

Total Highway and Bridge Maintenance 3,892,719

(Continued)

Exhibit M-9




Operation and Maintenance of EquipmentForemen $ 35,259 Mechanic(s) 144,331 Laborers 45,960 Longevity Pay 1,725 Overtime Pay 3,787 Social Security 13,784 State Retirement 25,298 Employee and Dependent Insurance 44,945 Employer Medicare 3,224 Maintenance & Repair Services- Equipment 61,591 Other Contracted Services 31,635 Diesel Fuel 122,692 Equipment and Machinery Parts 120,484 Garage Supplies 7,838 Gasoline 39,933 Lubricants 10,125 Tires and Tubes 43,446 Other Supplies and Materials 14,716

Total Operation and Maintenance of Equipment $ 770,773

Quarry OperationsForemen $ 38,956 Mechanic(s) 24,497 Equipment Operators 68,726 Truck Drivers 100,509 Clerical Personnel 1,882 Longevity Pay 2,375 Overtime Pay 322 Social Security 13,955 State Retirement 28,533 Employee and Dependent Insurance 52,602 Employer Medicare 3,264 Communication 747 Explosive and Drilling Services 25,861 Electricity 37,060 Equipment and Machinery Parts 19,157 Water and Sewer 323 Building Construction 165

Total Quarry Operations 418,934

(Continued)

Exhibit M-9




Other ChargesCommunication $ 6,203 Janitorial Services 6,600 Electricity 12,489 Natural Gas 13,572 Water and Sewer 3,638 Building and Contents Insurance 2,187 Liability Insurance 214,959 Trustee's Commission 64,922 Other Charges 5,871

Total Other Charges $ 330,441

Employee BenefitsUnemployment Compensation $ 2,225 Other Fringe Benefits 23,441 Workers' Compensation Insurance 117,000


Capital OutlayBridge Construction $ 113,929 Highway Equipment 230,575 Right-of-Way 10,000 State Aid Projects 279,860

Total Capital Outlay 634,364

Total Highway/Public Works Fund $ 6,477,902

Public Works FundAgriculture & Natural Resources

Storm Water ManagementAssistant(s) $ 48,226 Foremen 27,039 Equipment Operators 24,025 Truck Drivers 42,021 Secretary(s) 27,298 Clerical Personnel 10,000 Part-time Personnel 8,317 Longevity Pay 125 Overtime Pay 444 In-Service Training 2,970 Social Security 10,894

(Continued)

Exhibit M-9



Public Works Fund (Cont.)Agriculture & Natural Resources (Cont.)

Storm Water Management (Cont.)State Retirement $ 20,767 Employee and Dependent Insurance 40,670 Employer Medicare 2,548 Communication 3,195 Contracts with Private Agencies 203,384 Maintenance Agreements 2,500 Maintenance & Repair Services- Equipment 1,571 Postal Charges 47 Printing, Stationery and Forms 449 Rentals 3,802 Other Contracted Services 384 Crushed Stone 648 Data Processing Supplies 5,673 Equipment and Machinery Parts 3,066 Gasoline 10,030 Lubricants 30 Office Supplies 3,192 Other Supplies and Materials 9,182 Trustee's Commission 11,125 Data Processing Equipment 3,272 Motor Vehicles 11,628 Other Equipment 393,630

Total Storm Water Management $ 932,152

Total Public Works Fund $ 932,152

General Debt Service FundGeneral Government

Other General AdministrationTrustee's Commission $ 552,376 Other Debt Service 5,585

Total Other General Administration $ 557,961

PrincipalGeneral Government

Principal on Bonds $ 1,460,235 Principal on Notes 548,500

Total General Government 2,008,735

(Continued)

Exhibit M-9



General Debt Service Fund (Cont.)Principal (Cont.)

EducationPrincipal on Bonds $ 10,674,765 Principal on Notes 5,035,949

Total Education $ 15,710,714

InterestGeneral Government

Interest on Bonds $ 1,900,851 Interest on Notes 106,954

Total General Government 2,007,805

EducationInterest on Bonds $ 10,764,367 Interest on Notes 1,293,236

Total Education 12,057,603

Other Debt ServiceGeneral Government

Underwriter's Discount $ 148,400 Other Debt Issuance Charges 145,950

Total General Government 294,350

EducationUnderwriter's Discount $ 62,178 Other Debt Issuance Charges 52,950 Other Debt Service 213,017

Total Education 328,145

Total General Debt Service Fund $ 32,965,313

General Capital Projects FundOther Debt Service

General GovernmentUnderwriter's Discount $ 235,890 Other Debt Issuance Charges 287,741

Total General Government $ 523,631

Capital ProjectsGeneral Administration Projects

Architects $ 82,727 Building Construction 1,019,778

(Continued)

Exhibit M-9



General Capital Projects Fund (Cont.)Capital Projects (Cont.)

General Administration Projects (Cont.)Building Improvements $ 3,468 Data Processing Equipment 3,306 Furniture and Fixtures 35,671 Site Development 3,000 Other Equipment 1,929

Total General Administration Projects $ 1,149,879

Administration of Justice ProjectsArchitects $ 2,500 Furniture and Fixtures 10,481 Land 1,075,000

Total Administration of Justice Projects 1,087,981

Public Safety ProjectsConsultants $ 127,250 Engineering Services 16,775

Total Public Safety Projects 144,025

Agriculture and Natural Resource ProjectsArchitects $ 1,630 Other Charges 142 Building Construction 80,026 Furniture and Fixtures 7,133

Total Agriculture and Natural Resource Projects 88,931

Highway & Street Capital ProjectsContracts with Government Agencies $ 1,118,277 Building Construction 15,252

Total Highway & Street Capital Projects 1,133,529

Total General Capital Projects Fund $ 4,127,976

Nursing Home Projects FundCapital Projects

Public Health and Welfare ProjectsRefunds $ 33,831 Health Equipment 3,167

Total Public Health and Welfare Projects $ 36,998

Total Nursing Home Projects Fund 36,998

(Continued)

Exhibit M-9



Education Capital Projects FundOther Operations

Payments to CitiesOther Debt Service $ 5,131,730

Total Payments to Cities $ 5,131,730

Capital ProjectsEducation Capital Projects

Contributions $ 42,750,000 Total Education Capital Projects 42,750,000

Total Education Capital Projects Fund $ 47,881,730

Total Governmental Funds - Primary Government $ 153,565,342

Exhibit M-10


All Governmental Fund TypesDiscretely Presented Rutherford County School DepartmentFor the Year Ended June 30, 2005

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 62,511,217 Career Ladder Program 794,443 Career Ladder Extended Contracts 170,038 Educational Assistants 2,197,899 Other Salaries & Wages 849,911 Social Security 4,020,643 State Retirement 3,767,332 Life Insurance 81,103 Medical Insurance 8,153,166 Unemployment Compensation 95,043 Employer Medicare 939,668 Maintenance & Repair Services- Equipment 370 Contracts for Substitute Teachers - Non-certified 1,079,931 Other Contracted Services 12,652 Instructional Supplies and Materials 1,642,157 Textbooks 2,761,592 Other Supplies and Materials 184,316 Fee Waivers 63,641 Other Charges 117,589 Regular Instruction Equipment 1,184,902

Total Regular Instruction Program $ 90,627,613

Alternative Instruction ProgramTeachers $ 884,942 Career Ladder Program 11,254 Educational Assistants 67,741 Social Security 58,359 State Retirement 57,142 Life Insurance 1,262 Medical Insurance 120,840 Unemployment Compensation 1,332 Employer Medicare 13,649 Contracts for Substitute Teachers - Non-certified 14,086 Other Contracted Services 3,789 Instructional Supplies and Materials 24,187 Other Supplies and Materials 500 Other Equipment 1,189

Total Alternative Instruction Program 1,260,272

(Continued)

Exhibit M-10



General Purpose School Fund (Cont.)Instruction (Cont.)

Special Education ProgramTeachers $ 8,431,689 Career Ladder Program 115,524 Career Ladder Extended Contracts 4,500 Educational Assistants 1,314,551 Other Salaries & Wages 77,324 Social Security 600,392 State Retirement 649,211 Life Insurance 14,238 Medical Insurance 1,309,619 Unemployment Compensation 9,625 Employer Medicare 140,664 Maintenance & Repair Services- Equipment 13,217 Contracts for Substitute Teachers - Non-certified 156,115 Other Contracted Services 924,439 Instructional Supplies and Materials 167,945 Textbooks 89,570 Other Supplies and Materials 133,387 Other Charges 13,738 Special Education Equipment 93,659

Total Special Education Program $ 14,259,407

Vocational Education ProgramTeachers $ 4,251,967 Career Ladder Program 49,817 Career Ladder Extended Contracts 3,600 Clerical Personnel 36,831 Other Salaries & Wages 5,074 Social Security 262,310 State Retirement 220,460 Life Insurance 4,958 Medical Insurance 534,558 Unemployment Compensation 14,937 Employer Medicare 61,341 Maintenance & Repair Services- Equipment 21,538 Contracts for Substitute Teachers - Non-certified 85,121 Other Contracted Services 58,156 Instructional Supplies and Materials 187,683 Textbooks 120,371 Other Supplies and Materials 25,959

(Continued)

Exhibit M-10



General Purpose School Fund (Cont.)Instruction (Cont.)

Vocational Education Program (Cont.)Other Charges $ 208 Vocational Instruction Equipment 64,036

Total Vocational Education Program $ 6,008,925

Adult Education ProgramTeachers $ 246,943 Other Salaries & Wages 17,732 Social Security 16,275 State Retirement 9,322 Life Insurance 145 Medical Insurance 8,258 Employer Medicare 3,806 Other Contracted Services 2,662 Instructional Supplies and Materials 43,827 Other Supplies and Materials 2,475 Other Equipment 35,740

Total Adult Education Program 387,185

OtherContributions $ 2,114,953

Total Other 2,114,953

Support ServicesAttendance

Supervisor/Director $ 65,727 Career Ladder Program 5,000 Career Ladder Extended Contracts 2,000 Social Workers 164,998 Clerical Personnel 31,477 Social Security 16,283 State Retirement 16,680 Life Insurance 192 Medical Insurance 32,536 Employer Medicare 3,809 Travel 5,198 Other Contracted Services 93,884 Other Supplies and Materials 3,022 Other Charges 1,680 Attendance Equipment 4,144

Total Attendance 446,630

(Continued)

Exhibit M-10



General Purpose School Fund (Cont.)Support Services (Cont.)

Health ServicesMedical Personnel $ 805,867 Other Salaries & Wages 177,429 Social Security 59,655 State Retirement 112,493 Life Insurance 1,138 Medical Insurance 94,778 Employer Medicare 13,951 Travel 12,902 Drugs and Medical Supplies 7,550 Other Supplies and Materials 7,720 Other Charges 3,204 Health Equipment 1,599 Other Equipment 1,938

Total Health Services $ 1,300,224

Other Student SupportCareer Ladder Program $ 41,960 Guidance Personnel 2,844,971 Psychological Personnel 4,120 Career Ladder Extended Contracts 4,675 Social Workers 74,539 Clerical Personnel 139,227 Attendants 218,663 Other Salaries & Wages 466 Social Security 201,403 State Retirement 203,383 Life Insurance 4,156 Medical Insurance 369,158 Unemployment Compensation 282 Employer Medicare 47,102 Contracts with Government Agencies 90,206 Evaluation and Testing 115,444 Travel 6,595 Contracts for Substitute Teachers - Non-certified 17,801 Other Contracted Services 60,422 Other Supplies and Materials 20,498 In Service/Staff Development 281 Other Equipment 5,066

Total Other Student Support 4,470,418

(Continued)

Exhibit M-10




Regular Instruction ProgramSupervisor/Director $ 533,022 Career Ladder Program 101,924 Career Ladder Extended Contracts 16,000 Librarians 1,935,488 Materials Supervisor 37,432 Instructional Computer Personnel 1,300,880 Secretary(s) 53,779 Clerical Personnel 51,123 Educational Assistants 334,678 Other Salaries & Wages 293,788 In-Service Training 14,538 Social Security 281,824 State Retirement 285,674 Life Insurance 5,123 Medical Insurance 529,873 Unemployment Compensation 434 Employer Medicare 65,910 Travel 24,344 Contracts for Substitute Teachers - Non-certified 22,869 Other Contracted Services 41,269 Library Books/Media 161,073 Other Supplies and Materials 45,343 In Service/Staff Development 50,672 Other Equipment 9,093


Alternative Instruction ProgramSupervisor/Director $ 133,689 Career Ladder Program 7,496 Guidance Personnel 91,247 Librarians 40,746 Clerical Personnel 38,423 Other Salaries & Wages 46,965 Social Security 21,562 State Retirement 24,921 Life Insurance 384 Medical Insurance 46,317 Employer Medicare 5,043 Contracts for Substitute Teachers - Non-certified 132

(Continued)

Exhibit M-10




Alternative Instruction Program (Cont.)Library Books/Media $ 674 Other Supplies and Materials 7,229 Other Equipment 4,102

Total Alternative Instruction Program $ 468,930

Special Education ProgramSupervisor/Director $ 109,624 Career Ladder Program 21,201 Psychological Personnel 257,900 Career Ladder Extended Contracts 2,000 Secretary(s) 28,592 Clerical Personnel 23,845 Other Salaries & Wages 6,059 In-Service Training 2,700 Social Security 27,113 State Retirement 28,049 Life Insurance 441 Medical Insurance 55,616 Employer Medicare 6,341 Travel 67,906 Contracts for Substitute Teachers - Non-certified 72 Other Contracted Services 1,123 Other Supplies and Materials 59,986 In Service/Staff Development 16,278 Other Charges 5,501 Other Equipment 15,229

Total Special Education Program 735,576

Vocational Education ProgramSupervisor/Director $ 73,832 Social Security 4,446 State Retirement 4,061 Life Insurance 48 Employer Medicare 1,040 Travel 18,129 In Service/Staff Development 1,158 Other Equipment 1,525

Total Vocational Education Program 104,239

(Continued)

Exhibit M-10




Adult ProgramsSupervisor/Director $ 66,225 Clerical Personnel 32,415 Social Security 6,063 State Retirement 7,399 Life Insurance 96 Medical Insurance 8,216 Employer Medicare 1,418 Travel 1,430 Other Contracted Services 21,777 In Service/Staff Development 4,273

Total Adult Programs $ 149,312

Board of EducationSecretary to Board $ 93,054 Board and Committee Members Fees 82,736 Social Security 10,899 State Retirement 10,785 Life Insurance 96 Medical Insurance 416,372 Employer Medicare 2,549 Dues and Memberships 8,606 Legal Services 27,479 Travel 1,095 Judgments 9,160 Liability Insurance 404,307 Premiums on Corporate Surety Bonds 22,161 Trustee's Commission 1,390,782 Workers' Compensation Insurance 504,000 In Service/Staff Development 1,004 Criminal Investigation of Applicants - TBI 46,020

Total Board of Education 3,031,105

Director of SchoolsCounty Official/Administrative Officer $ 116,000 Other Salaries & Wages 24,970 Social Security 7,627 State Retirement 9,273 Life Insurance 96 Medical Insurance 8,212

(Continued)

Exhibit M-10




Director of Schools (Cont.)Employer Medicare $ 2,101 Other Fringe Benefits 4,800 Communication 197,886 Dues and Memberships 5,183 Postal Charges 48,685 Travel 4,422 Other Contracted Services 32,405 In Service/Staff Development 75 Other Charges 38,206 Administration Equipment 1,116

Total Director of Schools $ 501,057

Office of the PrincipalPrincipals $ 2,466,603 Career Ladder Program 121,331 Accountants/Bookkeepers 438,342 Career Ladder Extended Contracts 97,500 Assistant Principals 2,254,005 Secretary(s) 730,005 Clerical Personnel 585,473 Social Security 401,905 State Retirement 459,749 Life Insurance 7,725 Medical Insurance 700,383 Unemployment Compensation 4,056 Employer Medicare 94,063 Communication 240,998 Dues and Memberships 17,400 Contracts for Substitute Teachers - Non-certified 16,733 Other Contracted Services 16,549 Office Supplies 9,268 Other Charges 115,625 Administration Equipment 11,036

Total Office of the Principal 8,788,749

Fiscal ServicesSupervisor/Director $ 169,473 Accountants/Bookkeepers 168,277 Purchasing Personnel 66,895

(Continued)

Exhibit M-10




Fiscal Services (Cont.)Social Security $ 24,410 State Retirement 46,709 Life Insurance 468 Medical Insurance 40,116 Employer Medicare 5,709 Travel 3,047 Other Contracted Services 3,234 Office Supplies 15,544 Other Supplies and Materials 2,043 Administration Equipment 4,322

Total Fiscal Services $ 550,247

Operation of PlantCustodial Personnel $ 3,186,045 Social Security 192,822 State Retirement 334,835 Life Insurance 6,943 Medical Insurance 583,333 Unemployment Compensation 17,153 Employer Medicare 45,096 Other Contracted Services 260,434 Custodial Supplies 277,825 Electricity 5,156,284 Natural Gas 1,516,002 Water and Sewer 573,527 Other Supplies and Materials 9,752 Boiler Insurance 17,120 Building and Contents Insurance 205,766 Other Charges 202,366 Plant Operation Equipment 42,287

Total Operation of Plant 12,627,590

Maintenance of PlantSupervisor/Director $ 139,491 Secretary(s) 79,859 Maintenance Personnel 1,290,950 Social Security 91,829 State Retirement 174,547 Life Insurance 2,194

(Continued)

Exhibit M-10




Maintenance of Plant (Cont.)Medical Insurance $ 243,740 Unemployment Compensation 7,175 Employer Medicare 21,476 Laundry Service 13,769 Maintenance & Repair Services- Buildings 477,123 Maintenance & Repair Services- Equipment 176,312 Travel 3,185 Other Contracted Services 457,870 Other Supplies and Materials 517,369 Vehicle and Equipment Insurance 44,915 Other Charges 10,622 Maintenance Equipment 37,295

Total Maintenance of Plant $ 3,789,721

TransportationSupervisor/Director $ 53,036 Clerical Personnel 65,338 Other Salaries & Wages 30,013 Social Security 8,966 State Retirement 17,198 Life Insurance 230 Medical Insurance 15,885 Employer Medicare 2,097 Contracts with Vehicle Owners 7,380,436 Travel 4,991 Other Contracted Services 34,503 Other Supplies and Materials 9,157 Vehicle and Equipment Insurance 50,528 Other Charges 19,654 Administration Equipment 1,779

Total Transportation 7,693,811

Central and OtherSupervisor/Director $ 213,111 Computer Programmer(s) 642,660 Clerical Personnel 112,624 Other Salaries & Wages 38,860 Social Security 61,085 State Retirement 111,647

(Continued)

Exhibit M-10




Central and Other (Cont.)Life Insurance $ 1,143 Medical Insurance 116,894 Employer Medicare 14,286 Data Processing Services 30,963 Maintenance & Repair Services- Equipment 141,767 Travel 24,681 Other Contracted Services 60,945 Data Processing Supplies 2,906 Other Supplies and Materials 61,168 In Service/Staff Development 11,662 Administration Equipment 1,570 Data Processing Equipment 10,315

Total Central and Other $ 1,658,287

Operation of Non-Instructional ServicesFood Service

Supervisor/Director $ 113,352 Career Ladder Program 2,000 Accountants/Bookkeepers 31,477 Career Ladder Extended Contracts 2,000 Clerical Personnel 1,992 Cafeteria Personnel 72,720 Social Security 13,561 State Retirement 18,786 Life Insurance 145 Medical Insurance 15,538 Unemployment Compensation 14,828 Employer Medicare 3,172 Payments to Schools - Breakfast 578,633 Payments to Schools - Lunch 2,955,677 Travel 4,962 Other Contracted Services 50,396 Food Supplies 37,711 Office Supplies 1,705 Other Supplies and Materials 5,763 In Service/Staff Development 3,317 Food Service Equipment 3,618

Total Food Service 3,931,353

(Continued)

Exhibit M-10



General Purpose School Fund (Cont.)Operation of Non-Instructional Services (Cont.)

Community ServicesTeachers $ 240,570 Career Ladder Program 2,998 Educational Assistants 40,042 Social Security 17,033 State Retirement 18,037 Life Insurance 427 Medical Insurance 42,244 Employer Medicare 3,984 Contracts for Substitute Teachers - Non-certified 7,553 Other Supplies and Materials 1,200 Other Charges 33,131

Total Community Services $ 407,219

Capital OutlayRegular Capital Outlay

Other Contracted Services $ 21,884 Site Development 8,500 Other Capital Outlay 120,059

Total Regular Capital Outlay 150,443

Total General Purpose School Fund $ 171,659,419

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 1,136,893 Clerical Personnel 3,270 Educational Assistants 193,516 Other Salaries & Wages 27,884 In-Service Training 193,752 Non-certified Substitute Teachers 29,575 Social Security 94,512 State Retirement 94,262 Life Insurance 1,645 Medical Insurance 157,308 Unemployment Compensation 2,254 Employer Medicare 22,104 Postal Charges 298 Travel 1,358

(Continued)

Exhibit M-10



School Federal Projects Fund (Cont.)Instruction (Cont.)

Regular Instruction Program (Cont.)Other Contracted Services $ 63 Instructional Supplies and Materials 90,721 Other Supplies and Materials 129,118 In Service/Staff Development 11,655 Regular Instruction Equipment 67,736


Special Education ProgramTeachers $ 616,324 Educational Assistants 830,628 Other Salaries & Wages 313,634 Non-certified Substitute Teachers 26,971 Social Security 106,217 State Retirement 163,593 Life Insurance 4,208 Medical Insurance 340,447 Employer Medicare 24,842 Other Contracted Services 267,355 Instructional Supplies and Materials 751,412 Other Supplies and Materials 50,429 Special Education Equipment 273,976

Total Special Education Program 3,770,036

Vocational Education ProgramClerical Personnel $ 78,807 In-Service Training 3,218 Social Security 4,842 State Retirement 9,335 Life Insurance 235 Medical Insurance 23,238 Employer Medicare 1,133 Travel 7,091 Other Contracted Services 8,735 Instructional Supplies and Materials 49,634 Other Supplies and Materials 185,975 In Service/Staff Development 15,099 Vocational Instruction Equipment 109,749


(Continued)

Exhibit M-10



School Federal Projects Fund (Cont.)Instruction (Cont.)

Education EdgeInstructional Supplies and Materials $ 4,279 Vocational Instruction Equipment 450

Total Education Edge $ 4,729

Support ServicesHealth Services

Medical Personnel $ 43,549 Social Security 2,700 State Retirement 4,307 Life Insurance 58 Medical Insurance 912 Employer Medicare 631

Total Health Services 52,157

Other Student SupportSocial Workers $ 309,672 Attendants 177,000 Other Salaries & Wages 51,683 Social Security 32,114 State Retirement 39,617 Life Insurance 973 Medical Insurance 101,144 Employer Medicare 7,511 Travel 462 Other Contracted Services 2,525 Other Supplies and Materials 23,952 In Service/Staff Development 3,600 Other Charges 705

Total Other Student Support 750,958

Regular Instruction ProgramSupervisor/Director $ 70,766 Secretary(s) 25,255 Other Salaries & Wages 51,410 Social Security 8,979 State Retirement 9,647 Life Insurance 141 Medical Insurance 20,157 Employer Medicare 2,100

(Continued)

Exhibit M-10



School Federal Projects Fund (Cont.)Support Services (Cont.)

Regular Instruction Program (Cont.)Consultants $ 10,363 Maintenance & Repair Services- Equipment 45 Travel 3,259 Other Contracted Services 90,780 Other Supplies and Materials 20,870 In Service/Staff Development 675,291 Other Equipment 576

Total Regular Instruction Program $ 989,639

Special Education ProgramPsychological Personnel $ 417,337 Clerical Personnel 23,802 Other Salaries & Wages 582,397 Social Security 61,560 State Retirement 62,358 Life Insurance 1,033 Medical Insurance 142,751 Employer Medicare 14,397 Other Supplies and Materials 4,149 In Service/Staff Development 90,833 Other Equipment 91,284

Total Special Education Program 1,491,901

Vocational Education ProgramTravel $ 46,199 In Service/Staff Development 3,390


TransportationContracts with Vehicle Owners $ 37,838

Total Transportation 37,838

Operation of Non-Instructional ServicesFood Service

Cafeteria Personnel $ 3,314 Social Security 205 State Retirement 303 Employer Medicare 48

Total Food Service 3,870

Total School Federal Projects Fund $ 9,905,732

(Continued)

Exhibit M-10



Other Capital Projects FundCapital Projects

Education Capital ProjectsArchitects $ 1,204,827 Engineering Services 183,091 Building Construction 13,600,892 Building Improvements 2,104,345 Furniture and Fixtures 530,227 Land 2,693,224 Regular Instruction Equipment 2,209,172 Site Development 2,757,615 Other Equipment 33,438 Other Capital Outlay 364,592

Total Education Capital Projects $ 25,681,423

Total Other Capital Projects Fund $ 25,681,423

Total Governmental Funds - Rutherford County School Department $ 207,246,574

Exhibit M-11

Rutherford County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balances - City Agency FundsFor the Year Ended June 30, 2005

CitySchool

Cities - ADA -Sales Tax MurfreesboroFund Fund Total

Cash Receipts Current Property Tax $ 0 $ 7,746,168 $ 7,746,168 Trustee's Collections - Prior Years 0 113,934 113,934 Circuit/Clerk and Master Collections - Prior Years 0 97,207 97,207 Interest and Penalty 0 35,978 35,978 Pick-up Taxes 0 35,495 35,495 Payments in Lieu of Taxes - Local Utilities 0 94,126 94,126 Local Option Sales Tax 30,990,145 5,513,196 36,503,341 Wheel Tax 0 513,634 513,634 Business Tax 0 185,044 185,044 Interstate Telecommunications Tax 0 4,702 4,702 Marriage Licenses 0 2,717 2,717Total Cash Receipts $ 30,990,145 $ 14,342,201 $ 45,332,346

Cash Disbursements Remittance of Revenues Collected $ 30,680,244 $ 14,089,363 $ 44,769,607 Trustee's Commission 309,901 230,017 539,918Total Cash Disbursements $ 30,990,145 $ 14,319,380 $ 45,309,525

Excess of Cash Receipts Over (Under) Cash Disbursements $ 0 $ 22,821 $ 22,821Cash Balance, July 1, 2004 0 170,355 170,355

Cash Balance, June 30, 2005 $ 0 $ 193,176 $ 193,176

227

STATISTICAL SECTION

This part of the Rutherford County’s comprehensive annual report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health. Table Page Financial Trends: These schedules contain trend information to help the reader

understand how the government’s financial performance and well-being have changed over time.

1-5

229 Revenue Capacity: These schedules contain information to help the reader assess the

government’s most significant local revenue source, the property tax.

6-10

237 Debt Capacity: These schedules present information to help the reader assess the

affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. The tables on legal debt margin information and pledged-revenue coverage are not applicable to counties in Tennessee.

11-12

242 Demographic and Economic Information: These schedules offer demographic and economic indicators to help

the reader understand the environment within which the government’s financial activities take place.

13-14

244 Operating Information: These schedules contain service and infrastructure data to help the

reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs.

15-17

246 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

Table 1

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

PRIMARY GOVERNMENT: (Note 1, 2)Governmental activities

Invested in capital assets, net of related debt -$ -$ -$ -$ -$ -$ 115,910$ 149,327$ 166,358$ 162,068$ Restricted for:

Capital Projects - - - - - - 4,978 16,114 10,606 14,397 Debt Service - - - - - - 29,430 26,657 26,632 31,323 Solid Waste/Sanitation - - - - - - - - - 4,519 Adequate Facilities/Development Tax - - - - - - - - - 5,827 Highways/Public Works - - - - - - - - - 6,034 Other Purposes - - - - - - 6,910 7,590 10,618 2,924

Unrestricted (2) - - - - - - (217,979) (218,611) (221,776) (254,549) Total governmental activities net assets -$ -$ -$ -$ -$ -$ (60,751)$ (18,923)$ (7,562)$ (27,457)$

COMPONENT UNIT - Rutherford County Schools (Note 2)Governmental activities

Invested in capital assets, net of related debt -$ -$ -$ -$ -$ -$ 224,730$ 246,569$ 261,946$ 273,716$ Restricted for:

Capital Projects - - - - - - 37,769 19,815 16,309 38,446 Other Purposes - - - - - - 681 819 1,315 1,986

Unrestricted - - - - - - 13,049 12,457 17,378 16,968 Total governmental activities net assets -$ -$ -$ -$ -$ -$ 276,229$ 279,660$ 296,948$ 331,116$

Notes:(1) Rutherford County Government does not engage in any business-type activites.(2) Rutherford County Board of Education is not part of the Primary Government, but is reflected as a component unit. The primary government is responsible for the debt issued to finance

construction/improvement of education facilities; however, the physical structures are considered assets of the component unit.(3)

Rutherford County, TennesseeNet Assets by Component

(accrual basis of accounting)Last Ten Fiscal Years (in thousands) (Note 3)

GASB Statement 34 was implemented for the fiscal year ended June 30, 2002; therefore, the presented information is unavailable for periods before 2002.

Primary Government and Discretely Presented Component Unit

Fiscal Year

Table 2

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005EXPENSES (Note 1)Governmental activities:

General Government -$ -$ -$ -$ -$ -$ 9,291$ 930$ 2,244$ 1,639$ Finance - - - - - - 4,414 5,143 4,863 5,480 Administration of Justice - - - - - - 4,289 4,609 4,970 4,753 Public Safety - - - - - - 20,611 23,719 24,925 26,807 Public Health & Welfare - - - - - - 9,802 10,709 10,928 10,792 Social, Cultural & Rec. Services - - - - - - 1,023 2,538 1,203 1,186 Agriculture & Natural Resources - - - - - - 402 346 971 1,439 Other Operations - - - - - - - 5,118 4,811 6,880 Highways/Public Works - - - - - - 13,268 7,369 10,784 13,859 Education (Pymts to Comp. Unit) - - - - - - 52,058 28,827 40,140 67,167 Interest on Long-Term Debt - - - - - - 12,480 13,346 13,497 13,123 Other Debt Service - - - - - - - 20 - 1,146

Total Governmental activities expenses -$ -$ -$ -$ -$ -$ 127,638$ 102,674$ 119,336$ 154,271$

PROGRAM REVENUESGovernmental activities:

Charges for Services:General Government -$ -$ -$ -$ -$ -$ 3,389$ 3,345$ 3,679$ 4,226$ Finance - - - - - - 4,102 4,351 5,126 5,514 Administration of Justice - - - - - - 2,987 4,299 4,908 5,525 Public Safety - - - - - - 4,883 4,055 3,459 3,874 Public Health & Welfare - - - - - - 3,792 4,727 5,719 5,616 Social, Cultural & Rec. Services - - - - - - 9 9 9 8 Agriculture & Natural Resources - - - - - - 3 6 65 126 Other Operations - - - - - - - - 68 - Highways/Public Works - - - - - - 142 143 19 - Education - - - - - - - 12,164 18,139 21,634

Operating Grants and Contributions - - - - - - 6,361 7,446 5,120 6,279 Capital grants and Contributions - - - - - - 10,594 2,271 9,292 2,327

Total Governmental activities program revenues -$ -$ -$ -$ -$ -$ 36,262$ 42,816$ 55,603$ 55,129$

Fiscal Year

Rutherford County, TennesseeChanges in Net Assets


Table 2

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Net (expense)/Revenue Governmental Activities -$ -$ -$ -$ -$ -$ (91,376)$ (59,858)$ (63,733)$ (99,142)$

General Revenues and Other Changes in Net AssetsGovernemental Activities:

TaxesProperty tax levied for general purposes -$ -$ -$ -$ -$ -$ 16,945$ 17,933$ 22,585$ 22,520 Property tax levied for debt services - - - - - - 19,689 20,805 22,621 25,016 Sales tax - - - - - - 4,328 3,967 3,891 4,007 Other local taxes - - - - - - 11,138 12,154 15,407 16,366

Unrestricted grants and contributions - - - - - - 5,106 5,224 5,905 6,011 Investment earnings - - - - - - 2,377 1,583 1,065 2,501 Gain on disposal of capital assets - - - - - - - - 36 2,500 Miscellaneous - - - - - - 32 779 467 325

Total Governmental activities -$ -$ -$ -$ -$ -$ 59,615$ 62,445$ 71,977$ 79,246$

Change in Net Assets -$ -$ -$ -$ -$ -$ (31,761)$ 2,587$ 8,244$ (19,896)$

Notes:(1) Rutherford County Government does not engage in any business-type activites.(2)

(accrual basis of accounting)

GASB Statement 34 was implemented for the fiscal year ended June 30, 2002; therefore, the presented information is unavailable for periods before 2002.

Fiscal Year

Rutherford County, Tennessee

Changes in Net Assets (Cont.)

Last Ten Fiscal Years (in thousands) (Note 2)

Table 2a

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005EXPENSES (Note 1)Governmental activities:

Education -$ -$ -$ -$ -$ -$ 150,607$ 158,452$ 175,256$ 196,516$

Total Governmental activities expenses -$ -$ -$ -$ -$ -$ 150,607$ 158,452$ 175,256$ 196,516$

PROGRAM REVENUESGovernmental activities:

Charges for Services - Education -$ -$ -$ -$ -$ -$ 315$ 241$ 244$ 258$ Operating Grants and Contributions - - - - - - 8,953 9,377 13,040 16,650 Capital grants and Contributions - - - - - - 52,058 14,930 23,511 43,554

Total Governmental activities program revenues -$ -$ -$ -$ -$ -$ 61,326$ 24,548$ 36,795$ 60,462$

Net (expense)/Revenue Governmental Activities -$ -$ -$ -$ -$ -$ (89,281)$ (133,904)$ (138,461)$ (136,054)$

General Revenues and Other Changes in Net AssetsGovernemental Activities:

TaxesProperty tax levied for general purposes -$ -$ -$ -$ -$ -$ 32,759$ 34,645$ 41,219$ 42,453$ Sales tax - - - - - - 22,921 24,124 27,946 29,887 Other local taxes - - - - - - 3,054 3,155 3,398 3,709

Unrestricted grants and contributions - - - - - - 69,910 74,819 82,331 93,215 Investment earnings - - - - - - 463 281 203 460 Gain on disposal of capital assets - - - - - - - - 356 - Miscellaneous - - - - - - 92 311 296 498

Total Governmental activities -$ -$ -$ -$ -$ -$ 129,199$ 137,335$ 155,749$ 170,222$

Change in Net Assets -$ -$ -$ -$ -$ -$ 39,918$ 3,431$ 17,288$ 34,168$

Notes:(1) Rutherford County Schools do not engage in any business-type activites.(2) GASB Statement 34 was implemented for the fiscal year ended June 30, 2002; therefore, the presented information is unavailable for periods before 2002.

Rutherford County, TennesseeChanges in Net Assets - Rutherford County Schools


Fiscal Year

Table 3

Fiscal YearProperty Tax for General Purposes

Property Tax for Ruth. Co. Schools

Property Tax for Debt Service

Sales Tax - Primary

Government

Sales Tax - Ruth. Co. Schools

Other Local Tax - Primary

Govt.

Other Local Tax - Ruth. Co. Schools Total

1996 -$ -$ -$ -$ -$ -$ -$ -$

1997 - - - - - - - -

1998 - - - - - - - -

1999 - - - - - - - -

2000 - - - - - - - -

2001 - - - - - - - -

2002 16,945 32,759 19,689 4,328 22,921 11,138 3,054 110,834

2003 17,933 34,645 20,805 3,967 24,124 12,154 3,155 116,783

2004 22,585 41,218 22,621 3,891 27,946 15,407 3,398 137,066

2005 22,520 42,453 25,015 4,007 29,887 16,366 3,709 143,957

(1)unavailable for periods before 2002.

(accrual basis of accounting)(amounts expressed in thousands)

GASB Statement 34 was implemented for the fiscal year ended June 30, 2002; therefore, the presented information is

Rutherford County, TennesseeGovernmental Activities Tax Revenue by Source

Last Ten Fiscal Years (1)General Government and Discretely Presented Component Unit

Table 4

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005PRIMARY GOVERNMENTGeneral Fund

Reserved 237$ 317$ 528$ 636$ 843$ 958$ 1,006$ 1,561$ 2,247$ 2,978$ Unreserved 4,636 6,205 7,326 8,967 9,662 11,705 11,958 12,331 16,234 16,936

Total General Fund 4,873$ 6,522$ 7,853$ 9,603$ 10,504$ 12,663$ 12,964$ 13,892$ 18,481$ 19,914$

All other govenmental fundsReserved 999$ 12,570$ 2,820$ 1,591$ 1,407$ 1,120$ 837$ 724$ 757$ 501$ Unreserved, reported in:

Special revenue funds 5,326 7,656 9,909 8,674 10,988 11,952 10,190 11,031 14,743 18,308 Debt Service 12,804 15,256 19,179 21,469 26,004 31,953 31,664 28,975 28,765 30,267 Capital projects funds 2,431 4,035 6,108 5,115 2,601 946 8,456 12,869 6,117 14,382

Total all other govenmental funds 21,560$ 39,517$ 38,016$ 36,849$ 41,000$ 45,972$ 51,148$ 53,600$ 50,381$ 63,458$

COMPONENT UNIT - Rutherford County SchoolsGeneral Purpose School Fund

Reserved 5,316$ 3,330$ 4,332$ 4,424$ 6,060$ 3,522$ 3,045$ 4,415$ 7,269$ 5,758$ Unreserved 5,108 7,913 13,537 15,093 11,817 8,385 7,484 5,412 6,954 9,875

Total General Purpose School Fund 10,424$ 11,243$ 17,869$ 19,517$ 17,877$ 11,907$ 10,529$ 9,827$ 14,223$ 15,633$

All other school fundsReserved 12,225$ 16,533$ 5,103$ 22,374$ 38,340$ 29,704$ 28,556$ 22,738$ 7,535$ 5,659$ Unreserved, reported in:

Capital projects funds 10,821 (2,193) 34,234 2,194 2,991 1,076 9,894 (2,104) 10,089 33,399 Total all other govenmental funds 23,046$ 14,340$ 39,337$ 24,568$ 41,331$ 30,780$ 38,450$ 20,634$ 17,624$ 39,058$

Fiscal Year

Rutherford County, TennesseeGeneral Government Fund Balances - Primary Government and Discretely presented Component Unit

Last Ten Fiscal Years(modified accrual basis of accounting)

(amounts expressed in thousands)

Table 5

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Revenues

Taxes 67,484$ 75,042$ 82,188$ 89,991$ 98,365$ 109,730$ 115,597$ 121,848$ 142,164$ 150,852$ Licenses & Permits 585 521 716 1,115 838 727 946 1,112 1,314 1,693 Fines & Forfeitures 1,081 1,180 1,287 979 1,308 1,347 1,546 1,882 2,286 2,638 Charges for Service 4,651 5,268 5,532 6,072 5,707 6,173 6,883 8,270 9,385 10,046 Other Local Revenue 4,994 5,946 5,619 6,074 7,614 8,242 4,161 3,212 2,881 4,771 Fees from Co. Officials 2,371 2,491 2,999 3,459 3,911 4,295 4,822 5,370 6,029 9,953 State Revenues 53,715 61,065 66,174 70,986 73,821 75,876 78,917 84,838 91,580 99,272 Federal Revenues 4,963 5,624 6,720 6,090 7,960 7,572 9,070 9,717 13,657 16,050 Other Govt/Citizens 206 2,878 334 2,530 277 203 3,627 1,206 545 452

Total revenues 140,050$ 160,015$ 171,569$ 187,296$ # 199,801$ # 214,165$ # 225,569$ # 237,455$ # 269,841$ # 295,727$

ExpendituresGeneral Government 5,218$ 3,780$ 3,648$ 3,686$ 6,366$ 8,783$ 4,646$ 4,562$ 5,096$ 5,331$ Finance 1,379 2,696 3,167 3,490 2,442 2,696 4,393 5,021 4,872 5,452 Admin. Of Justice 1,998 3,280 2,996 3,166 2,526 2,661 4,268 4,566 4,752 4,780 Public Safety 7,248 8,387 11,084 13,874 15,878 17,716 19,927 22,028 24,010 25,910 Public Health/Welfare 5,248 5,819 6,861 7,769 8,280 9,451 9,504 10,623 11,657 11,591 Social, Cultural/Rec. 568 626 702 889 937 1,006 1,023 1,095 1,103 1,086

242 257 271 297 335 372 386 359 446 1,418 Other Operations 3,815 4,558 3,486 3,295 4,464 4,072 4,297 5,015 4,712 11,206 Highway & Bridge 4,695 5,063 5,355 5,648 5,222 5,579 5,555 5,831 6,455 6,478 Education 85,750 97,233 101,415 112,558 122,877 133,889 138,682 147,432 161,932 181,565 Debt Service

Principal 10,184 11,301 11,379 12,811 12,744 13,543 14,070 16,975 16,384 17,719 Interest 5,597 6,701 7,174 8,841 8,314 10,271 12,537 13,105 13,761 14,065 Other charges 170 290 164 1,146

Capital Projects-General 3,615 21,038 12,050 9,046 5,436 3,610 2,468 5,585 8,716 3,289 Capital Projects-Schools 18,756 20,384 18,914 14,569 27,593 43,187 45,727 32,804 28,206 25,681

154,313$ 191,123$ 188,502$ 199,939$ 223,414$ 257,006$ 267,773$ 275,001$ 292,266$ 316,717$

Excess of revenues over(under) expenditures (14,263)$ (31,108)$ (16,933)$ (12,643)$ (23,613)$ (42,841)$ (42,204)$ (37,546)$ (22,425)$ (20,990)$

Fiscal Year

Agriculture & Natural Resource

Rutherford County, TennesseeChanges in Fund Balances General Governmental and Discretely Presented Component Unit

Last Ten Fiscal Years

Table 5

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Other financing sources (uses)42,948$ 14,794$ 46,032$ 141$ 916$ 2,732$ 7,488$ 5,583$ 7,383$ 11,187$

(42,948) (14,794) (45,946) (38) (805) (2,605) (8,471) (5,912) (7,197) (11,678) - 22,500 35,015 - 43,900 30,850 54,220 22,581 24,995 53,500

2,180 20,332 13,190 - - 2,133 - - -

- - - - - 73,585 - 7,534 - 60,165

- - - - - (74,074) - (7,534) - (64,792) - - 18 - 27 902 628 158 - 6,502 - - - - (250) (72) - - - - - - - - - - - - 4,000

TOTAL OTHER SOURCES 2,180$ 42,832$ 48,309$ 104$ # 43,788$ # 33,451$ # 53,865$ # 22,409$ # 25,181$ # 58,884$

(12,083)$ 11,724$ 31,376$ (12,539)$ 20,175$ (9,390)$ 11,661$ (15,137)$ 2,756$ 37,894$

12.0% 12.0% 11.8% 12.3% 11.1% 11.4% 12.2% 12.7% 11.9% 11.4%

Property Sales Hotel Wheel Litigation Business Mineral Other local Bank Excise Wholesale Interstate Total TaxTax Tax Tax Tax Tax Tax Tax Tax Tax Beer Telecom Revenue

$48,478 $13,201 $345 $3,310 $381 $1,001 $376 $0 $110 $282 $0 $67,48452,670 14,457 410 3,476 420 1,088 363 1,662 204 292 0 75,042 57,996 15,543 441 3,645 480 1,154 385 2,069 178 297 0 82,188 63,270 16,843 445 3,841 479 1,340 429 2,754 221 359 0 89,981 67,899 18,686 456 4,086 529 1,341 493 4,165 269 441 0 98,365 70,934 25,647 632 6,180 674 1,356 310 3,102 168 698 29 109,730 74,293 26,810 543 6,625 749 1,420 335 3,890 241 658 33 115,597 78,153 28,172 579 6,820 873 1,462 361 4,429 214 744 41 121,848 91,540 31,549 644 7,205 884 1,664 453 7,150 279 761 35 142,164 96,676 33,700 645 7,649 909 1,969 534 7,701 406 628 35 150,852

Includes recurring expenditures of the general, special revenue, capital projects and debt service fund types.

20042005

Debt Service as a percentage of noncapital expenditures

Fiscal Year

Transfers in

2000200120022003

1996199719981999

Premiums on Bonds soldTransfer to component unitProceeds on Sale of Land

Transfers outBond proceedsNote proceeds

Proceeds on refunded bondsPayments to refunded bond escrow agent

Rutherford County, TennesseeChanges in Fund Balances General Governmental and Discretely Presented Component Unit

Last Ten Fiscal Years (Cont.)

Net change in fund balances

FiscalYear

General Governmental and Discretely Presented Component Unit TAX Revenues by SourceLast Ten Fiscal Years (expressed in thousands)

Table 6

Rutherford County, TennesseeAssessed and Estimated Actual Value of Property

Last Ten Fiscal Years

Ratio of Total

Fiscal Year Assessed Value

Ending Tax Tax Real Property Personal Property Public Utilities Total To Total Estimated

June 30 Year Rate Estimated Assessed Estimated Assessed Estimated Assessed Estimated Assessed Actual Value

1996 1995 3.15$ 4,424,508,000$ 1,274,934,645$ 620,552,975$ 186,165,892$ 178,805,224$ 89,402,612$ 5,223,866,199$ 1,550,503,149$ 29.68%

1997 1996 3.30 4,745,928,800 1,366,884,875 669,991,587 200,997,476 149,501,544 82,225,849 5,565,421,931 1,650,108,200 29.65

1998 1997 3.37 5,078,872,200 1,465,911,480 724,533,679 217,360,103 145,589,653 80,074,309 5,948,995,532 1,763,345,892 29.64

1999 1998 2.78 6,839,877,800 1,962,731,840 807,020,614 242,118,810 177,208,473 97,464,660 7,824,106,887 2,302,315,310 29.43

2000 1999 2.78 7,308,228,200 2,100,499,940 859,717,699 257,924,467 191,292,080 105,210,644 8,359,237,979 2,463,635,051 29.47

2001 2000 2.78 7,793,905,200 2,237,519,835 823,454,620 247,060,102 188,371,398 103,604,269 8,805,731,218 2,588,184,206 29.39

2002 2001 2.78 8,268,341,800 2,373,819,640 845,079,350 253,563,060 194,901,282 107,195,705 9,308,322,432 2,734,578,405 29.38

2003 2002 2.51 9,748,484,300 2,798,492,465 889,493,780 266,890,260 216,907,176 119,298,947 10,854,885,256 3,184,681,672 29.34

2004 2003 2.80 10,227,529,400 2,927,993,510 913,226,059 274,004,385 201,952,962 116,024,129 11,342,708,421 3,318,022,024 29.25

2005 2004 2.80 10,802,285,100 3,086,158,845 941,673,640 282,527,970 217,588,269 119,673,548 11,961,547,009 3,488,360,363 29.16

Sources: Trustee Tax Rolls, Assessor Geographic Tax Rolls, Public Service Commission

Note: Exempt properties are not included in the assessed or estimated value because the property assessor does not currently place values on these.

Table 7

Rutherford County, TennesseeProperty Tax Rates (per $100 assessed value)

Direct and Overlapping GovernmentsLast Ten Fiscal Years

Percent of

(2) County Tax

Fiscal Year (1) Net Rate Collected for

Ending Tax Rutherford Average Daily County Benefit of the City City of Town of City of City of

June 30 Year County Attendance Factor Rate of Murfreesboro Murfreesboro Smyrna LaVergne Eagleville

1996 1995 3.15$ 0.1884 2.80$ 11.11% 2.28$ 0.48$ 0.54$ 1.03$

1997 1996 3.30 0.1856 2.96 10.30% 2.26 0.48 0.54 1.03

1998 1997 3.37 0.1832 2.51 10.00% 2.26 0.48 0.54 1.03

1999 1998 2.78 0.1820 2.51 9.71% 1.90 0.48 0.50 0.79

2000 1999 2.78 0.1767 2.52 9.35% 1.90 0.72 0.50 0.79

2001 2000 2.78 0.1739 2.53 8.99% 1.90 0.83 0.50 0.79

2002 2001 2.78 0.1684 2.54 8.63% 1.90 0.72 0.50 0.79

2003 2002 2.51 0.1670 2.29 8.76% 1.70 0.72 0.50 0.72

2004 2003 2.80 0.1631 2.56 8.57% 1.72 0.69 0.50 0.72

2005 2004 2.80 0.1575 2.57 8.21% 1.72 0.69 0.50 0.72

Source: Trustee's Office, City Recorders, and Tennessee Association of Businesses

(1) Average daily attendance factor is the weighted full time equivalent determined by the Tennessee Department of Education and is based on the number of students attending county and city school systems. By law, Rutherford County must share locally generated revenue with the City of Murfreesboro for its school system.(2) Net county rate is arrived at by multiplying the portion of the tax rate designated for school purposes by the ADA factor and subtracting from the total county rate.

Table 8

Percentage of Percentage ofTaxpayer Assessed 2004 Total Taxes Assessed 1995 Total Taxes

Type of Business Rank Valuation Tax Liability Levied (2) Rank Valuation Tax Liability Levied (2)

Nissan Motor Mfg. Co. 1 202,313,155$ 4,042,645$ 4.13% 1 219,637,464$ 3,624,222$ (1) 8.33%Automobile Maker

Bridgestone 2 37,934,645 1,062,170 1.09% 2 53,493,064 1,685,031 3.87%Tire Maker

Middle Tennessee Electric 3 36,115,893 1,011,245 1.03% 4 21,026,090 662,332 1.52%Public Utility-Electric Company

Pillsbury Co./General Mills 4 26,143,259 732,010 0.75% 5 20,861,930 657,151 1.51%Bakery Goods

BellSouth 5 21,989,484 615,706 0.63% 3 25,594,907 806,239 1.85%Public Utility-Telephone Co.

Southpark, Nashville, LLC 6 21,577,920 604,181 0.62%Warehousing

HCA Health Services 7 18,119,075 507,334 0.52%Stone Crest Medical Center

Stones River, LLC 8 14,097,680 394,734 0.40% 9 9,346,000 294,339 0.68%Mall

Rich-Healy 9 13,493,750 377,825 0.39% 6 7,237,005 476,341 (3) 1.09%Bakery Goods

Osborne-Hessey Storage Co. 10 11,444,240 320,439 0.33%Warehousing

State Farm Insurance 7 12,061,113 379,925 0.87%Regional Office-Insurance Co.

Cumberland Swann 8 11,025,288 328,620 0.75%Pharmaceutical/Health Co.

United Cities Gas 10 9,034,242 284,578 0.65%Public Utilities 9.88% 21.13%

Source: Trustee Tax Rolls, In-Lieu-of Tax Agreements

(1) The taxes represent $697,625 (1995 tax year) and $867,228 (2004 tax year) collected on real and personal property for the transport division. Theremaining amount of $2,926,597 (1995) and $3,175,417 (2004) represents net tax payments collected through payment in-lieu of tax agreements.

(2) This information is presented instead of the percent of assessed value, since Nissan's payment is principally basedon a payment in-lieu-of tax agreement that is not assessment driven.

(3) Of total taxes collected in 1995-96, $286,338 represents payments made for prior year in lieu of payments not billed.

19952004

Rutherford County, TennesseePrincipal Taxpayers

For the Fiscal Year Ended June 30, 2005

Table 9 Rutherford County, Tennessee

Property Tax Levies and Collections-By Tax YearLast Ten Fiscal YearsAs of June 30, 2005

Ratio of Ratio of

Total Fiscal Year Percent of Delinquent Total Total Tax Outstanding Delinquent Taxes

Tax Tax Fiscal Year Tax Tax Collections to Delinquent to TotalTax Year Levy Collections Collected Collections Collections Tax Levy Taxes Tax Levy

1995 48,463,816$ 46,983,363$ 96.95% 1,384,487$ 48,367,850$ 99.80% 95,966$ 0.20%

1996 53,625,211 51,236,492 95.55% 2,334,270 53,570,762 99.90% 54,450 0.10%

1997 58,776,790 56,966,453 96.92% 1,732,006 58,698,459 99.87% 78,331 0.13%

1998 64,252,785 62,134,729 96.70% 1,996,654 64,131,383 99.81% 121,402 0.19%

1999 68,779,516 65,913,865 95.83% 2,810,222 68,724,087 99.92% 55,429 0.08%

2000 72,057,084 68,830,952 95.52% 3,141,721 71,972,673 99.88% 84,411 0.12%

2001 76,232,827 72,780,582 95.47% 3,256,621 76,037,203 99.74% 195,624 0.26%

2002 79,909,122 76,104,340 95.24% 3,545,933 79,650,273 99.68% 258,849 0.32%

2003 93,099,927 89,736,798 96.39% 2,788,444 92,525,242 99.38% 574,685 0.62%

2004 97,889,256 94,864,349 96.91% (1) 94,864,348 96.91% 3,024,907 3.09%

Source: Trustee tax collection records and tax rolls, clerk and master tax collection records.

(1) Taxes are current until August 1st of the following year.

Table 10

Rutherford County, TennesseeAssessed and Estimated Actual Value of In-Lieu-of Tax Agreements

and Tax PaymentsLast Ten Fiscal Years

Fiscal Year

Ending Tax TaxJune 30 Year Estimated Assessed Payments

1996 1995 1,078,086,001$ 387,687,709$ 3,489,173$

1997 1996 1,096,700,168 387,133,376 3,369,071

1998 1997 1,093,417,168 411,865,838 3,389,612

1999 1998 1,087,029,548 383,265,128 2,881,009

2000 1999 1,087,029,548 383,265,128 2,881,009

2001 2000 1,087,029,548 383,265,128 2,881,008

2002 2001 1,317,357,830 377,729,024 2,884,301

2003 2002 1,351,106,813 392,534,657 2,914,150

2004 2003 1,218,399,585 424,667,199 3,370,062

2005 2004 1,246,266,807 423,810,464 3,381,739

Source: In lieu of tax agreements

NOTE: The value of properties subject to in-lieu-of tax payments is included in the agreements with each company. The county received payments from six companies in 2004-2005, with Nissan representing approximately 93.9% of the total. Section 7-53-305, TCA is the statutory basis for these agreements, which allows the county's Industrial Development Board to finance new development with revenue bonds, and establish these agreements during the term of the bonds.

In-lieu-of tax revenues are included in the General Fund. The revenues reflected in the financial statements include payments received from Nissan for the Town of Smyrna Tennessee

241

Table 11

Rutherford County, TennesseeRatio of Net General Obligation Bonded Debt

To Assessed Value and Net General Obligation Bonded Debt Per CapitaLast Ten Fiscal Years

Ratio of Net

Bonded

General Less: Net Debt to Net Bonded

Fiscal Bonded Amounts Available Bonded Assessed Assessed (1) Debt per

Year Debt in Debt Service Fund Debt Value Value Population Capita

1996 116,033,098$ 12,803,874$ 103,229,224$ 1,550,503,149$ 6.66% 146,573 704$

1997 147,780,521 16,198,276 131,582,245 1,650,108,208 7.97 154,543 851

1998 185,313,634 19,411,437 165,902,197 1,763,345,892 9.41 161,942 1,024

1999 173,328,929 21,469,367 151,859,562 2,302,315,310 6.60 167,703 906

2000 205,361,403 26,003,765 179,357,638 2,463,635,051 7.28 171,783 1,044

2001 229,156,330 31,952,799 197,203,531 2,588,184,206 7.62 182,023 1,083

2002 269,306,881 31,664,227 237,642,654 2,734,578,405 8.69 190,143 1,250

2003 275,187,432 28,975,397 246,212,035 3,184,681,672 7.73 194,934 1,263

2004 283,797,983 28,764,889 246,212,035 3,318,022,024 7.42 202,310 1,217

2005 318,888,534 30,266,866 288,621,668 3,488,360,363 8.27 210,025 1,374

Sources: Table 5, Tennessee Dept. of Economic & Community Developmen

(1) Population figures are estimated for all years except 1996 and 2001 fiscal years

NOTE: General Bonded Debt on this table includes capital outlay notes, since most have maturities in excess of 10 years

Table 12 Rutherford County, TennesseeDirect and Overlapping Debt

General Obligation Bonds and NotesAs of June 30, 2005

Direct Debt

General Bonded Debt 302,245,000$ Notes Payable 16,643,534 Less: General Debt Service Fund (30,266,866)

Total Direct Debt 288,621,668$

Overlapping Debt

City of Murfreesboro 114,946,047$ Town of Smyrna 4,985,187 City of Lavergne 10,620,000 City of Eagleville 140,000

Total Overlapping Debt 130,691,234

Total Direct and Overlapping Debt 419,312,902$

Source: City Recorders

Table 13

Per (3) County Average

Fiscal Year (1) Capita Median School Unemployment

Ending June 30 Population Income Age Enrollment rate

1996 146,573 (2) 22,041$ 29.8 21,943 3.6%

1997 159,543 22,575 29.8 22,930 3.4%

1998 161,942 24,321 29.8 23,898 3.8%

1999 167,703 25,212 29.8 24,228 2.6%

2000 171,783 25,716 29.8 24,750 2.5%

2001 182,023 26,630 31.2 25,793 2.9%

2002 190,143 26,533 31.2 26,817 3.8%

2003 194,934 26,946 31.2 28,049 4.1%

2004 202,310 26,935 31.2 29,410 4.1%

2005 210,025 27,910 31.2 31,058 4.1%

Source: University of Tennessee, Center for Business & Economic Research, Tennessee Department of Education, Bureau of Economic Analysis & Business and Economic Research Center

(1) Populations are estimated for all years except fiscal years 1996 & 2001.(2) Special Census conducted- represents actual figures.(3) The Census Bureau determines the median age for local areas each decade. The last determination was during the 2000 census and will be determined again after the 2010 census.

Rutherford County, TennesseeDemographic StatisticsLast Ten Fiscal Years

Table 14

Employer Employees Rank

Nissan Motor Manufacuring Corp. USA 7,000 1 6.54%

Rutherford County Government & Board of Education 2,985 2 2.79%

Ingram Book Company 2,010 3 1.88%

Bridgestone/Firestone, Inc. 1,887 4 1.76%

Middle Tennessee State University 1,835 5 1.71%

Whirlpool Corporation 1,500 6 1.40%

Alvin C. York Veterans Administration Medical Center 1,411 7 1.32%

City of Murfreesboro 1,300 8 1.21%

Middle Tennessee Medical Center 1,200 9 1.12%

Verizon Wireless 1,200 10 1.12%

Total 20.86%

Source: Chamber of Commerce Tennessee Department of Labor

(1) Data for nine years ago is not available.

Rutherford County, TennesseePrincipal Employer

Current Year (1)

% of Total County

Employment

2005

Table 15

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Function:

General Government 46 47 49 52 54 54 57 58 58 58

Finance 41 42 44 45 49 50 52 52 52 52

Justice 52 52 52 59 68 68 73 76 77 78

Public Safety 191 209 289 313 348 352 357 366 387 397

Health & Welfare 106 117 130 137 156 157 159 169 179 186

Agriculture 1 1 1 1 4 4 6 6 7 12

Other 2 2 2 2 3 3 3 3 3 3

Road & Bridge 71 71 72 71 72 71 73 71 71 71

Total 510 541 639 680 754 759 780 801 834 857

COMPONENT UNIT:

Education 1,832 1,935 2,055 2,199 2,204 2,354 2,467 2,444 2,597 2,748

Rutherford County, TennesseeFull-Time Employees by Function

Last Ten Years

Employees as of June 30,

Table 16

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005FUNCTION

General Government Registered Voters 70,989 77,569 80,738 82,766 86,541 89,247 93,415 96,682 105,286 116,705

Building Permits Issued 1816 1980 2111 1984 2106 2419 2201 2253 2154 2414 Single Family Homes 786 1,047 992 858 779 642 618 585 566 828 All other permits 1,030 933 1,119 1,126 1,327 1,777 1,583 1,668 1,588 1,586 Public Safety Number of warrants served: State 8,850 8,720 8,304 7,433 8,742 9,764 10,155 9,518 10,542 10,216 Civil 17,477 10,793 16,385 14,035 14,624 15,964 16,762 16,390 17,638 17,655

Public Health Ambulance- Call Volume N/A N/A 12,030 12,617 12,613 13,688 14,803 16,432 17,341 16,978 Response Time -avg. minutes N/A N/A 8 8 9 9 8 8 8 9 Animal Control Requests for service N/A N/A N/A N/A 7,662 9,327 12,764 14,765 13,313 10,937 Animals Impounded N/A N/A N/A N/A 8,312 8,510 8,822 9,739 8,510 7,421 Animals Adopted N/A N/A N/A N/A 1,335 1,496 1,498 1,385 1,596 1,774

Road & Bridge Street Resurfaced (miles) N/A N/A N/A N/A N/A N/A N/A N/A N/A 71.7

Sanitation (tons per day) Refuse Collected N/A N/A N/A 80.4 83.8 84.1 92.9 97.9 103.1 111.8 Recyclables Collected N/A N/A N/A N/A N/A N/A N/A N/A 10.8 12.7

N/A= Information is not available for this period.

Rutherford County, TennesseeOperating Indicators by Function

June 30, 2005

Fiscal Year

Table 17

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

FUNCTION

Highways and Streets Number of Streets in System 1,485 1,506 1,441 1,506 1,574 1,650 1,689 1,724 1,759 1,763 Number of Miles 950 922 912 927 931 936 940 942 941 946 Number of Bridges 152 153 208 208 208 161 162 157 157 157

Public Safety Number of Correctional Facilities 3 3 3 3 3 3 3 3 3 3

Health and Welfare Nursing Home 1 1 1 1 1 1 1 1 1 1 Number of Beds 131 131 131 131 131 131 131 131 131 131 Dispatch Station 1 1 1 1 1 Ambulance Stations 5 4 6 6 7 8 8 8 8 10 Number of ambulance units 11 13 14 15 17 14 14 14 17 20 Sanitation/Landfill Number of trucks Health Department Facilities 2 2 2 2 2 2 2 2 2 2

Facilities and Services Not Included in the Primary Government

Education: Form of Administration Director of Schools, Appointed

Number of Employees 2,006 2,219 2,392 2,527 2,694 2,826 2,622 2,622 2,597 2,771 Elementary Schools 16 16 18 19 19 21 21 21 21 21 Middle Schools 3 3 3 3 3 3 3 3 6 7 High Schools 5 5 5 5 5 6 6 6 7 7 K-12 School 1 1 1 1 1 1 1 1 1 1 Alternative School 1 1 1 1 1 1 1 1 2 2

Rutherford County, TennesseeCapital Assets by Function

June 30, 2005

Fisal Year

245

SINGLE AUDIT SECTION





REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

September 21, 2005

Rutherford County Mayor and Board of County Commissioners Rutherford County, Tennessee To the County Mayor and Board of County Commissioners: We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information Rutherford County, Tennessee, as of and for the year ended June 30, 2005, which collectively comprise Rutherford County’s basic financial statements and have issued our report thereon dated September 21, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered Rutherford County’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Rutherford County’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions are described in the

accompanying Schedule of Findings and Questioned Costs as items 05.02, 05.04, 05.05, 05.06, 05.08 and 05.09. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness. Compliance and Other Matters As part of obtaining reasonable assurance about whether Rutherford County’s statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Findings and Questioned Costs as items 05.01, 05.03, and 05.07. We also noted certain matters that we reported to the management of Rutherford County in separate communications. This report is intended solely for the information and use of the Board of County Commissioners, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours,






REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO

EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

September 21, 2005

Rutherford County Mayor and Board of County Commissioners Rutherford County, Tennessee To the County Mayor and Board of County Commissioners: Compliance We have audited the compliance of Rutherford County with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2005. Rutherford County’s major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Rutherford County’s management. Our responsibility is to express an opinion on Rutherford County’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America, the auditing standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Rutherford County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Rutherford County’s compliance with those requirements.

In our opinion, Rutherford County complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2005. Internal Control Over Compliance The management of Rutherford County is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Rutherford County’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Federal Awards We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Rutherford County, Tennessee, as of and for the year ended June 30, 2005, and have issued our report thereon dated September 21, 2005. Our audit was performed for the purpose of forming opinions on the basic financial statements taken as a whole. The accompanying Schedule of Expenditures of Federal Awards and State Grants is presented for purposes of additional analysis, as required by OMB Circular A-133, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the Board of County Commissioners, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours,


OTHER AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS For Community Care of Rutherford County, Inc.

Board of Directors Community Care of Rutherford County, Inc. Murfreesboro, Tennessee We have audited the financial statements of Community Care of Rutherford County, Inc., a component unit of Rutherford County, Tennessee, as of and for the year ended June 30, 2005, and have issued our report thereon. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered Community Care of Rutherford County, Inc.’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider being material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether Community Care of Rutherford County, Inc.’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the board of directors of Community Care of Rutherford County, Inc., management, and state and federal audit agencies and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record, and its distribution is not limited.

OTHER AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS For Rutherford County Emergency Communications District

To the Board of Directors Rutherford County Emergency Communications District Murfreesboro, Tennessee We have audited the financial statements of Rutherford County Emergency Communications District as of and for the year ended June 30, 2005, and have issued our report thereon. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered Rutherford County Emergency Communications District’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance As part of obtaining reasonable assurance about whether Rutherford County Emergency Communications District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Board of Commissioners, management, and appropriate regulatory authorities and is not intended to be and should not be used by anyone other than these specified parties.

Rutherford County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1)For the Year Ended June 30, 2005

Pass-Federal through

Federal/Pass-through Agency/State CFDA Agency'sGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Passed-through State Department of Agriculture: Food Distribution (Noncash Assistance) 10.550 (2) $ 973,486 Passed-through State Department of Education: Child Nutrition Cluster: School Breakfast Program 10.553 (2) 591,894 National School Lunch Program 10.555 (2) 2,980,008 Passed-through State Department of Human Services: Child Nutrition Cluster: Summer Food Service Program for Children 10.559 (2) 72,479Total U.S. Department of Agriculture $ 4,617,867

U.S. Department of Housing and Urban Development: Passed-through State Housing Development Agency: Home Investment Partnerships Program 14.239 HM0361 $ 111,310Total U.S. Department of Housing and Urban Development $ 111,310

U.S. Department of the Interior: Direct Program: Payments in Lieu of Taxes 15.226 N/A $ 32,369Total U.S. Department of the Interior $ 32,369

U.S. Department of Justice: Direct Program: Drug Court Discretionary Grant Program 16.585 N/A $ 82,000 Local Law Enforcement Block Grants Program 16.592 N/A 18,406 Public Safety Partnership and Community Policing (COPS - UHP) 16.710 N/A 370,214 (3) Public Safety Partnership and Community Policing (COPS IN SCHOOLS) 16.710 N/A 238,297 (3) Passed-through State Department of Children's Services: Juvenile Accountability Incentive Block Grants 16.523 GG039856501 27,380 (4) Juvenile Accountability Incentive Block Grants 16.523 GG041052800 9,534 (4) Passed-through State Office of Criminal Justice Programs: Edward Byrne Memorial State and Local Law Enforcement Assistance Discretionary Grants Program 16.580 Z9908837600 75,001 Violence Against Women Formula Grants 16.588 Z0000140401 45,491Total U.S. Department of Justice $ 866,323

U.S. Department of Labor: Passed-through State Department of Education: WIA Incentive Grants-Section 503 Grants to States 17.267 GG051117001 $ 29,293Total U.S. Department of Labor $ 29,293

National Science Foundation: Passed-through Tennessee State University: Education and Human Resources 47.076 (2) $ 7,994Total National Science Foundation $ 7,994

U.S. Department of Education: Passed-through State Department of Education: Adult Education - State Grant Program 84.002 (2) $ 240,808 Civil Rights Training and Advisory Services 84.004 N/A 13,033 Title 1 Grants to Local Educational Agencies 84.010 N/A 1,969,651

Special Education Cluster: Special Education - Grants to States 84.027 N/A 6,438,231 Special Education - Preschool Grants 84.173 N/A 101,064 Vocational Education - Basic Grants to States 84.048 N/A 444,962

(Continued)

Rutherford County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (Cont.)

Pass-Federal through

Federal/Pass-through Agency/State CFDA Agency'sGrantor Program Title Number Number Expenditures

Special Education Cluster (Cont.): Safe and Drug Free Schools and Communities - State Grants 84.186A (2) 84,480 Education for Homeless Children and Youth 84.196 (2) 65,949 Education Edge (School-to-Work Opportunities) 84.278 N/A 3,507 Twenty-First Century Community Learning Centers 84.287 (2) 45,726 State Grants for Innovative Programs 84.298 N/A 298,876 Education Technology State Grants 84.318 (2) 55,274 Comprehensive School Reform Demonstration 84.332A (2) 99,075 Advanced Placement Program 84.330 N/A 1,205 English Language Acquisition Grants 84.365A N/A 191,211 Improving Teacher Quality State Grants 84.367 N/A 832,291Total U.S. Department of Education $ 10,885,343

U.S. Department of Health and Human Services: Passed-through State Office of Criminal Justice Programs: Child Support Enforcement 93.563 HM0361 $ 3,995Total U.S. Department of Health and Human Services $ 3,995

U.S. Department of Homeland Security: Passed-through State Department of Military: Homeland Security Grant Program 97.004 Z0301779600 $ 149,001 (5) Homeland Security Grant Program 97.004 Z0402014101 492,337 (5) Homeland Security Grant Program 97.004 Z0402248900 36,699 (5) Flood Mitigation Assistance 97.029 GG04112880 151,312 Emergency Management Performance Grants 97.042 (2) 35,824Total U.S. Department of Homeland Security $ 865,173

Total Expenditures of Federal Awards $ 17,419,667

State Grants State Reappraisal Program - Comptroller of the Treasury N/A (2) $ 49,020 Teen Trax Grant - State Department of Children's Service N/A GG0410510 62,827 Juvenile Justice - State Commission on Children and Youth N/A Z0502042400 9,000 Helicon Grant - State Department of Economic and Community Development N/A (2) 437,820 Adult Education - State Department of Education N/A Z050222610 60,762 Safe Schools Act - State Department of Education N/A (2) 113,978 Litter Grant - State Department of Environment & Conservation N/A (2) 89,969 Recycling Program - State Department of Environment & Conservation N/A (2) 25,724 Waste Tire Program - State Department of Environment & Conservation N/A Z0301135100 121,920 Rural Local Health Services - State Department of Health N/A Z0401537000 1,085,965

Total State Grants $ 2,056,985

CFDA = Catalog of Federal Domestic AssistanceN/A = Not Applicable(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.(2) Information not available.(3) Total Public Safety Partnership and Community Policing from the U. S. Department of Justice (CFDA Number 16.710) $608,511.(4) Total Juvenile Accountability Incentive Block Grants from the U. S. Department of Justice (CFDA Number 16.523) $36,914.(5) Total Homeland Security Grant Program from the U. S. Department of Homeland Security (CFDA Number 97.004) $678,037.

Rutherford County, Tennessee Schedule of Audit Findings Not Corrected June 30, 2005 Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Presented below are findings from the Comprehensive Annual Financial Report for Rutherford County, Tennessee, for the year ended June 30, 2004, which have not been corrected. OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK Finding Number

Page Number

Subject

04.04 256 Sufficient user documentation for the courts’

software application was not maintained OFFICE OF REGISTER Finding Number

Page Number

Subject

04.05 256 The Office of Register allowed individuals

unsupervised access to the office after business hours

OFFICE OF SHERIFF Finding Number

Page Number

Subject

04.07 257 The commissary did not deposit funds within

three days of collection OTHER FINDINGS AND RECOMMENDATIONS Finding Number

Page Number

Subject

04.08

257 Duties were not segregated adequately in the Office of Juvenile Court Clerk

04.09 258 A central system of purchasing had not been adopted


SCHEDULE OF FINDINGS AND QUESTIONED COSTS

For the Year Ended June 30, 2005

PART I, SUMMARY OF AUDITOR’S RESULTS

1. An unqualified opinion was issued on the financial statements of Rutherford County. 2. The audit of the financial statements disclosed reportable conditions in internal

control. None of these conditions was considered to be a material weakness. 3. The audit disclosed no instances of noncompliance that are material to the financial

statements of Rutherford County. 4. The audit disclosed no reportable conditions in internal control over major programs. 5. An unqualified opinion was issued on compliance for major programs. 6. The audit revealed no findings that are required to be reported under Section 510(a)

of OMB Circular A-133. 7. The Food Distribution (CFDA No. 10.550); the Child Nutrition Cluster: School

Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children (CFDA Nos. 10.553, 10.555, and 10.559); Title I Grants to Local Educational Agencies (CFDA No. 84.010); and Homeland Security Grant Program (CFDA No. 97.004) were determined to be major programs.

8. A threshold of $522,590 was used to distinguish between Type A and Type B federal

programs. 9. Rutherford County did qualify as a low-risk auditee.

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PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS Findings and recommendations, as a result of our examination, are presented below. We have reviewed these findings and recommendations with management to provide an opportunity for their response. The written response of the register is paraphrased in this report. Other officials offered oral responses to certain findings and recommendations; however, these oral responses have not been included in this report. OFFICE OF COUNTY MAYOR FINDING 05.01 BID SPECIFICATIONS FOR A TRUCK PURCHASE APPLIED

ONLY TO ONE BRAND (Noncompliance Under Government Auditing Standards)

The office solicited bids for the purchase of a truck using bid specifications that could be met by only one manufacturer and accepted the one bid received ($92,875). Using bid specifications that apply only to a particular brand of equipment violates the intent of Chapter 421, Private Acts of 1943, as amended, which requires competitive bids on purchases exceeding $5,000. RECOMMENDATION The office should develop bid specifications that are not brand specific. Bids should then be evaluated on the basis of several criteria, including price, quality, availability, warranty, maintenance costs, experience, etc.

______________________________ OFFICE OF DIRECTOR OF FINANCE FINDING 05.02 THE WORKERS’ COMPENSATION FUND HAD A NET ASSETS

DEFICIT (Internal Control – Reportable Condition Under Government Auditing Standards)

The Workers’ Compensation Fund (Internal Service Fund) had a net assets deficit of $395,906 at June 30, 2005. This net assets deficit resulted from an increase in the estimate of claims incurred as of June 30, 2005. RECOMMENDATION County officials should liquidate the net assets deficit and should closely review and monitor this situation to determine if the fund can be self-sufficient over an extended period of time.

______________________________

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OFFICE OF HIGHWAY SUPERINTENDENT FINDING 05.03 COMPETITIVE BIDS WERE NOT SOLICITED FOR A TRUCK

(Noncompliance Under Government Auditing Standards) Highway Department officials advised that the department did not competitively bid on a truck but purchased the truck ($21,552) from a local vendor under a state contract. However, it was subsequently determined that this vendor did not have the state contract for this type of truck. Therefore, the Highway Department violated the Uniform Road Law, Section 54-7-113, Tennessee Code Annotated, which requires competitive bids on purchases exceeding $10,000.

RECOMMENDATION Highway Department officials should verify the state contract information prior to purchasing from vendors representing themselves to be on the state contract.

______________________________ OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK FINDING 05.04 THE OFFICE USED AN UNAUTHORIZED SIGNATURE

STAMP (Internal Control – Reportable Condition Under Government Auditing

Standards) The Office of Circuit, General Sessions, and Juvenile Courts Clerk used a signature stamp to affix the clerk’s signature to checks issued by the office. State statutes do not provide authority for county offices and departments to use a signature stamp in place of an individual’s actual signature. RECOMMENDATION In the absence of statutory authority, the clerk should discontinue using the signature stamp.

______________________________ FINDING 05.05 SUFFICIENT USER DOCUMENTATION FOR THE COURTS’

SOFTWARE APPLICATION WAS NOT MAINTAINED (Internal Control – Reportable Condition Under Government Auditing

Standards) The Office of Circuit, General Sessions, and Juvenile Courts Clerk did not maintain formal user documentation pertaining to the courts’ software. This documentation is necessary to

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provide users with information regarding system maintenance, system inputs, application processing requirements, output definitions, and system recovery. Inadequate documentation may result in inaccurate and inefficient processing of applications. RECOMMENDATION The office should maintain user documentation for the courts’ software. The county’s agreement with the software vendor explicitly states that the vendor will provide the county with a user’s manual and related documentation. Therefore, management should contact their vendor and obtain current user documentation for the court software.

______________________________ OFFICE OF REGISTER FINDING 05.06 THE OFFICE OF REGISTER ALLOWED INDIVIDUALS

UNSUPERVISED ACCESS TO THE OFFICE AFTER BUSINESS HOURS (Internal Control – Reportable Condition Under Government Auditing Standards)

The register did not adequately control access to her office. Individuals who were not office employees had unsupervised access to the office after business hours. Allowing persons who are not employees to have unsupervised access to an office after business hours seriously weakens internal controls over assets. RECOMMENDATION Individuals who are not office employees should not be allowed unsupervised access to the office after business hours. MANAGEMENT’S RESPONSE – REGISTER For over 40 years attorneys and others performing title searches have had access to the office after business hours, and during this time there have never been any problems occurring as a result. All cash is secured at the close of business and is inaccessible to anyone other than my staff. This process benefits not only the attorneys involved but my staff as well. REBUTTAL Internal control over assets extends beyond the cash of the office, to include the security of records and equipment which are subject to theft and abuse. This unsupervised access could expose the county to potential liability claims and safety issues for people who are not employees.

______________________________

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OFFICE OF SHERIFF FINDING 05.07 THE OFFICE DID NOT DEPOSIT COMMISSARY FUNDS

WITHIN THREE DAYS OF COLLECTION (Noncompliance Under Government Auditing Standards)

The Sheriff’s Department did not deposit commissary funds within three days of collection. Section 5-8-207, Tennessee Code Annotated, requires county officials to deposit public funds to the office bank account within three days after receipt of the funds. RECOMMENDATION The sheriff should ensure that all funds are deposited to the office bank account within three days of collection as required by state statute.

______________________________ OTHER FINDINGS AND RECOMMENDATIONS FINDING 05.08 DUTIES WERE NOT SEGREGATED ADEQUATELY IN THE

OFFICE OF JUVENILE COURT CLERK AND THE CORRECTIONAL WORK CENTER (Internal Control – Reportable Condition Under Government Auditing Standards)

Duties were not adequately segregated among the official and employees in the Office of Juvenile Court Clerk and the Rutherford County Correctional Work Center. Employees responsible for maintaining the accounting records in these offices were also involved in receipting, depositing, and/or disbursing funds. RECOMMENDATION To strengthen internal controls over operations, these offices should segregate duties adequately among employees.

______________________________ FINDING 05.09 A CENTRAL SYSTEM OF PURCHASING HAD NOT BEEN

ADOPTED (Internal Control – Reportable Condition Under Government Auditing

Standards) Rutherford County officials had not adopted a central system of purchasing. Establishing a central system would significantly improve internal controls over the purchasing process.

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RECOMMENDATION Rutherford County officials should consider adopting the County Financial Management System of 1981 or a private act, which would provide for a central system of purchasing covering all county departments.

PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

There were no findings and questioned costs for federal awards.

RUTHERFORD COUNTY, TENNESSEE AUDITEE REPORTING RESPONSIBILITIES

For the Year Ended June 30, 2005 There were no audit findings relative to federal awards presented in the prior audit’s Schedule of Findings and Questioned Costs or the current year’s Schedule of Findings and Questioned Costs.

COMPREHENSIVE ANNUAL FINANCIAL REPORT RUTHERFORD …

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